Top things to consider when investing in a property in Dubai

Top things to consider when investing in a property in Dubai

Friday 04 August 2023Wed 16 Feb
Top things to consider when investing in a property in Dubai

Whether you’re new to Dubai or old, it comes as no surprise that the property market has been booming, statistics keep rising daily and new property records are being broken almost weekly.

So, has investing in a property in Dubai been on your radar?

Naturally so, and if you’ve been wondering how to get started on that there are a few things you should consider before investing.

Oh, and in case you didn’t know - You could now get your hands on the golden visa through property investments in Dubai worth AED 2 million or higher, sweet right?

Well then, here are top things you should consider before investing in a property in Dubai.

Location, location, location!

Where you live can determine almost everything, from convenience to return on investment, it inevitably all boils down to your location.

Look for areas with strong ROI, good infrastructure, easy access to amenities such as pools, gyms, spas, schools, hospitals, shopping centres, and transportation hubs.

Desirable locations tend to have better appreciation potential and attract tenants or buyers more easily, you could consider locations such as Downtown Dubai, Jumeirah Golf Estates, Dubai Marina or Jumeirah Lake Towers.

Rental yields and potential

Investing 101 consists of finding the right place to generate a good rental income through or even a buying price if you’re planning to flip and sell.

Regardless of your plans, it's crucial to study up the rental yields, and return on investments in the place or development you’re planning to invest in. Consider the demand for rental properties or potential resale value. Understanding market dynamics helps you make informed investment decisions.

Take a look at the average rental rates and vacancy rates to determine the potential return on investment by considering factors such as rental demand, job market stability, and rental regulations.

Property evaluation

If you’ve reached the point where you’ve found yourself comfortable with the location and are comfortable with the rental yields, its not time to evaluate properties and assess the one that checks all the boxes.

Take a look at the condition of the property, if there are any repairs or costs to be incurred and how does the appeal of the property affect your future ROI and rental yield?

Some factors to look at:

Does the property have strong security measures set in place? Such as CCTVs, security guards, and gates?

Are there electrical sockets around the house?

Is there a gas line or connection?

Are all the plumbing and piping lines working correctly?

Does the property have basic fixtures and fittings in place?

Does anything require fixing or repainting?

Does the property have an open-space with natural light?

If your heart is set on the house but requires maintenance and upkeep - get in touch with our in-house Home Maintenance team!

Financing options and long-term investment strategy

If you’re in it for the long-haul, it's key to note that there are multiple financing options you can consider when investing in a property in Dubai. This could include a single/joint mortgage, developer financing (where the developers offer finance solutions to buyers), bank loans, and equity release (if you hold a property, you can use the equity in that property to fund this new one).

Regardless of your financing choice, it's important to have financing options available, an idea of all the associated costs, this includes the interest rates, loan terms and down payment requirements. Once you’ve got them locked in, you should then calculate the potential mortgage payments, monthly and see if they match with your financial goals.

Once you’ve finalised the financing option for your home, you should consider an investment strategy. This could be evaluating if you want a long-term application, rental income or a combination of both? Long-term applications mean when you buy-and-hold your property over a spaced out duration, this is done so the property’s ROI appreciates over time and investors can sell it for a higher price. Whereas, rental income is when the investor puts the property up on rent to generate a rental income through.

It's key to analyse which area of the horizon you’re leaning on so once the property’s handed over, you can get right into action. If you’re looking to get expert financial guidance or advice get in touch with our in-house mortgage experts.

Consider property management

If you don't have the time or don’t want the hassle of managing the property yourself, you can consider the cost and availability of professional property management services. This is particularly important for remote or investment properties.

And we do recommend it, as you can kick back and relax while your property is being managed from home maintenance, to legal regulations, to getting your property up on rent - everything is handled. If you’d like expert advice on property management or would like to know how the process works - get in touch with our in-house team.

Seeking legal and regulatory advice

When you’re investing for the first time around, we highly suggest getting yourself familiarised with the legal and regulatory aspects of property investment. Get in touch with a legal council and understand the local property laws, tax implications, zoning regulations, and any restrictions on renting or selling as this can help you decide if you want to go ahead with this property or not.

Some developers do not allow flipping, or renters even and that could be an issue with your investment. If you’d like legal and regulatory advice on your investments, get in touch with our in-house experts.

Seek professional advice

We would suggest talking to your realtor and gaining valuable insights and help you make informed decisions when it comes to financing, law and property investment.

Most importantly we’d recommend assessing the risks, and chatting with your realtor to identify the risks associated with the investment, including market volatility, potential vacancies, interest rate fluctuations, and unforeseen expenses and how you can diversify your investment portfolio to mitigate risks.

If you’re keen to know more or would like to talk to one of our experts - get in touch!

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