Investing in property for the first time can feel overwhelming, particularly in a market as fast-moving as the UAE. From choosing the right area to understanding returns and avoiding costly mistakes, new investors often face a steep learning curve as they decide where and how to begin.
As part of Property Finder’s Expert Insights series, we sat down with Faress AlKhouri, Sales Manager at First Choice Properties, to break down what first-time investors should know before purchasing their first property.
Read on to discover how to identify the right asset to balance rental income with long-term growth. Here is his practical playbook for making smarter investment decisions in the UAE property market.
For someone investing in property for the first time, what are the most important factors they should consider before choosing a property?
For first-time investors, choosing the right property begins with understanding the broader landscape of the UAE real estate market. Regulations, developer credibility, and long-term area growth all play a crucial role in determining whether an investment will perform well over time.
According to Faress AlKhouri, the most important decision is selecting the right asset from the start. Investors should evaluate the developer’s track record, research government development plans, and understand how an area is expected to evolve over the next three to five years.
“If you want to invest properly, you need to understand what the area will look like in the future,” he explains. “Infrastructure projects, population growth, and government initiatives often determine where opportunities will emerge.”
Equally important is defining a clear investment goal. Some investors plan to sell before handover for capital gains, while others aim to hold the property for long-term rental income. Understanding liquidity and financial capacity helps investors determine which strategy is realistic for them.
Market data can also play a major role in guiding decisions. Official platforms such as DXB Interact in Dubai or ADRE reports in Abu Dhabi offer insights into transaction activity, rental performance, and price trends that help investors make more informed choices.
How should beginners evaluate rental yield, and what is considered a “healthy” yield in today’s UAE market?
Rental yield is one of the first metrics investors look at when evaluating property performance, but Faress AlKhouri emphasises that it should never be viewed in isolation.
Return on investment, he explains, is the result of both rental income and capital appreciation. While rental yield measures annual income relative to the property’s value, the long-term increase in property prices can significantly influence overall returns.
In Abu Dhabi, the average rental yield typically sits around 7 per cent, which is generally considered a balanced return in the market. Some areas may offer higher yields, sometimes reaching 11 to 12 per cent, but these spikes are often linked to temporary supply shortages rather than sustainable long-term trends.
Investors should also take a long-term view when assessing yield. Calculating returns based on a single year can be misleading, particularly in areas where large numbers of properties are expected to be handed over.
For example, Faress AlKhouri notes that upcoming supply in some Dubai communities could influence rental performance, while areas experiencing strong demand and limited supply may see yields increase significantly over time.
When selecting an investment property, how can first-time investors balance the potential for rental income with long-term capital appreciation?
Balancing income and growth is one of the most important decisions investors must make when selecting a property.
Some investors prioritise immediate rental income, choosing ready properties in established communities that already attract tenants. Others focus on capital appreciation, investing in developing areas where prices may increase as infrastructure, attractions, and amenities are completed.
Large master-planned developments often follow this pattern. Property values may rise significantly only after the entire area is developed, and lifestyle attractions begin drawing residents and visitors.
Palm Jumeirah is a clear example. Faress AlKhouri notes that the highest appreciation occurred years after the handover, once destinations such as West Beach and its surrounding restaurants were fully established.
For investors seeking higher rental income, entertainment-driven destinations such as Yas Island in Abu Dhabi often generate higher yields due to tourism demand and nearby attractions.
Ultimately, the right balance depends on the investor’s financial strategy and timeline. A knowledgeable broker can provide insights into market data and project fundamentals, but investors must first determine whether their goal is long-term growth or steady rental income.
Are there specific property types or locations that tend to be more suitable for first-time investors, and why?
Many first-time investors prefer to start small by purchasing a one- or two-bedroom unit, allowing them to test the market before committing to larger investments.
Buying from established developers such as Emaar, Aldar, or Meydan can also provide additional reassurance, particularly for international buyers who may be unfamiliar with the UAE property market.
Faress AlKhouri notes that investors from regions such as Europe or the United States often approach the market more cautiously. Rapid price increases, especially in off-plan developments, can appear unusual compared with slower-moving markets elsewhere.
To build confidence, brokers often present official data and market reports that demonstrate historical performance and investment potential.
For those seeking a safer starting point, recently handed-over properties in well-established communities can provide stability. However, investment preferences vary widely. Some investors prioritise waterfront properties, believing they preserve value better, while others prefer early launches within new developments, anticipating price growth as the project progresses.
Ultimately, the best choice depends on the investor’s risk tolerance, financial position, and long-term strategy.
What common mistakes do you see first-time investors make, and how can they avoid them early on?
One of the most common mistakes Faress AlKhouri observes is investors stretching their finances too far when purchasing property.
In some cases, buyers are drawn to ambitious payment plans or optimistic projections of future appreciation. While a property may appear attractively priced, selling it quickly — even at a profit — can take time, particularly if market conditions change.
When investors overextend themselves financially, they may eventually be forced to sell the property at a loss, a situation known as a distress sale.
To avoid this, investors should ensure they fully understand payment schedules and maintain sufficient liquidity to comfortably manage their commitments.
Another mistake is becoming overly influenced by marketing hype around new launches. Instead of focusing solely on promotional material, investors should evaluate practical factors, such as whether the property will be easy to rent, the strength of demand in the area, and whether financing options are available.
A clear risk management strategy is essential. Investors should consider resale potential, rental demand, service charges, and financing options before committing to a purchase.
Looking ahead, what market trends or indicators should first-time investors keep an eye on to make smarter, future-proof investment decisions?
Investors who want to stay ahead of the market should closely monitor population growth, infrastructure development, and government initiatives, all of which influence long-term property demand.
Major infrastructure projects often drive property values in surrounding areas. Developments such as new bridges, entertainment destinations, or tourism attractions can significantly boost demand for nearby housing.
For example, upcoming tourism initiatives and entertainment projects across the UAE are expected to create new growth corridors in several emerging communities.
Investors should also examine supply levels within specific areas. If large numbers of units are scheduled for handover within a short period, rental prices may temporarily soften due to increased availability.
Comparing similar projects can also provide valuable insights. By analysing how previous investors performed, whether they sold before handover or held properties for rental income, buyers can better understand potential outcomes.
Ultimately, Faress AlKhouri emphasises that the fundamentals of real estate remain unchanged.
“The most important factors will always be location, location, location,” he says.
Alongside location, investors should also evaluate developer reputation, service charges, building quality, and long-term maintenance history. Together, these factors create the foundation for a property investment that performs well over time.
Farees Al Khouri
Sales Manager at First Choice Properties
Faress Alkhouri is a Sales Manager at First Choice Properties, specialising in Abu Dhabi’s real estate market. With a strong focus on helping clients make informed investment decisions, he works closely with buyers and investors to identify high-potential opportunities across the emirate.
Known for his client-focused approach, Faress supports clients through every stage of the property journey, from uncovering the right opportunities to guiding transactions through to completion. Passionate about real estate and continuous learning, he is committed to helping clients unlock long-term value through smart property investments.
