{"id":234,"date":"2019-07-17T12:15:38","date_gmt":"2019-07-17T12:15:38","guid":{"rendered":"https:\/\/staging.propertyfinder.ae\/guides\/?p=234"},"modified":"2019-10-13T11:01:05","modified_gmt":"2019-10-13T11:01:05","slug":"what-you-need-to-know-to-before-buying-an-investment-property-in-dubai","status":"publish","type":"post","link":"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/","title":{"rendered":"What you need to know before buying an investment property in Dubai"},"content":{"rendered":"\n<p>Investing in property is a great way to build wealth and generate income. However, all investments carry risk and there are many factors to consider before investing in Dubai\u2019s real estate market to ensure you yield the highest possible returns.<\/p>\n\n\n\n<h2>Why invest in Dubai?<\/h2>\n\n\n\n<ul><li><strong>The city offers higher rental yields<\/strong> than many other mature real estate markets. On average, investors can achieve gross rental yields of between 5-9%<em>.<\/em><\/li><li><strong>Property prices per square foot are lower than many other cities globally<\/strong>, making Dubai an affordable location to own prime real estate. <em>Check <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.propertyfinder.ae\/blog\/trends-v5-how-many-square-feet-can-1-million-get-you-dubai-vs-worlds-top-cities\/\" target=\"_blank\">How Many Square Feet Can $1 Million Get You in Dubai?<\/a><\/em><\/li><li><strong>New visa laws linked to property investment enable investors to gain a residence visa subject to certain conditions.<\/strong> For properties valued above AED 1 million, you may be entitled to a 2-year residency visa. For properties valued above AED 5 million, you may be entitled to a 5-year residency visa. While for properties valued at above AED 10 million, you may be entitled to a 10-year residency visa.<\/li><li><strong>Highly favourable tax conditions<\/strong> in particular, the absence of property taxes and stamp duties, that are applicable in other global real estate markets, also paints the city as a highly attractive investment environment.<\/li><\/ul>\n\n\n\n<h2><strong>What to consider when selecting an investment property select an investment property<\/strong><\/h2>\n\n\n\n<p>Strong return on investment (ROI) is the ultimate goal when investing in property. Securing a property which delivers healthy rates of return requires proper due diligence from the outset. Here are some of the factors that can influence ROI:<\/p>\n\n\n\n<ul><li>Location<\/li><li>Facilities and amenities available in the community, including proximity to transport, education, childcare etc.<\/li><li>Size<\/li><li>Quality<\/li><li>Market conditions and timing of purchase<\/li><li>Interest rates<\/li><li>Maintenance costs (RERA Service Charge and Maintenance Index)<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img width=\"1024\" height=\"331\" src=\"https:\/\/staging.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-1024x331.jpg\" alt=\"\" class=\"wp-image-1214\" srcset=\"https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-1024x331.jpg 1024w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-400x129.jpg 400w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-768x248.jpg 768w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-750x242.jpg 750w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-06-300x97.jpg 300w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3><strong>Where to invest for high ROI<\/strong><\/h3>\n\n\n\n<p>In the first half of 2019, Dubai Silicon Oasis (DSO) offered the highest gross returns of 9.5% for apartments. New communities, Meydan and DAMAC Hills closely followed, offering gross rental yields of 9.3% and 8.9% respectfully, again for apartments.<\/p>\n\n\n\n<p>For villa and townhouse communities, Town Square yielded the strongest gross returns at 7.8%, followed by The Springs (6.6%), Reem &#8211; Mira (6.4%) and Mudon (6.3%).<\/p>\n\n\n\n<p>For more insights on Where to invest in Dubai right now click <em><a href=\"https:\/\/www.propertyfinder.ae\/blog\/where-to-invest-in-dubai-right-now\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">here<\/a><\/em><\/p>\n\n\n\n<p><em><a href=\"https:\/\/s3-ap-southeast-1.amazonaws.com\/pf-documents\/pf-trends-report\/property-finder-trends-vol-6.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">For a full list of rental yields for H1 2019 by community, download your copy of Trends here<\/a><\/em><\/p>\n\n\n\n<h3><strong>Tips for achieving strong ROI<\/strong><\/h3>\n\n\n\n<ul><li><strong>Apartments typically provide stronger rental yields<\/strong> than townhouses and villas due to Dubai\u2019s largely transient, low to mid-income population with a budget geared toward smaller, affordable homes.<\/li><li><strong>Opt for smaller sized apartments (studio and 1-bedroom) in affordable communities <\/strong>with established infrastructure, near to transport and essential amenities such as education and healthcare.<\/li><li><strong>Resale of smaller units is faster<\/strong> and offers a better value compared to larger sized properties, mainly because a major segment of Dubai&#8217;s expat population can afford to purchase these when the investor wants to release equity.<\/li><li>Annual maintenance charges payable to the Dubai Land Department based on the RERA Service Charge and Maintenance Index can materially impact overall returns. This index determines a specific charge per square foot and varies by community. Up to date fees can be sourced directly from the DLD\u2019s website. Research the applicable charges for your preferred community before investing.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img width=\"1024\" height=\"415\" src=\"https:\/\/staging.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-1024x415.jpg\" alt=\"\" class=\"wp-image-1233\" srcset=\"https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-1024x415.jpg 1024w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-400x162.jpg 400w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-768x311.jpg 768w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-750x304.jpg 750w, https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/08\/Buyers-Infographics-07-300x122.jpg 300w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<div id=\"subscribe\" class=\"contextual\">\n  <div class=\"row justify-content-left \">\n    <div class=\"col-md align-self-center\">\n      <h3>No time to read the whole Buyer Guide right now?<\/h3>\n      <p>No worries. We can send you a pdf copy to read when you have more time.  Just let us know where to send it (takes 5 seconds)<\/p>\n    <\/div>\n    <\/div>\n      <form class=\"subscriber-form\" id=\"contextual-form\" method=\"post\" action=\"\">\n        <input type=\"hidden\" name=\"subscriber_form[page][email_source]\" value=\"guides\">\n        <input type=\"hidden\" name=\"subscriber_form[page][email_form_location]\" value=\"blog_buyer\">\n        <input type=\"hidden\" name=\"subscriber_form[page][email_source_content]\" id=\"pathname\" value=\"\">\n        <input type=\"hidden\" name=\"subscriber_form[page][language]\" id=\"pageLang\" value=\"en\">\n        <select class=\"hide\" name=\"subscriber_form[page][subscribed]\" required >\n              <option value=\"yes\" selected>Yes<\/option>\n            <\/select>\n    <div class=\"row justify-content-between\">\n    <div class=\"col-md align-self-center\">\n          <input type=\"email\" name=\"subscriber_form[page][email]\" placeholder=\"Enter your email here\" class=\"input\" required=\"\">\n       <\/div>\n      <div class=\"col-auto align-self-center\">\n      <input type=\"submit\" name=\"subscriber_form[page][button]\" class=\"button\" value=\"Get the Guide\"><\/div><\/div>\n      <small>Your email address is safe with us and you can unsubscribe easily any time.<\/small>\n  <\/form><\/div>\n\n\n\n<h2><strong>Off-plan property vs. ready property<\/strong><\/h2>\n\n\n\n<p>Investing in off-plan property or ready property in the secondary market each have pros and cons. Each individual\u2019s financial situation and risk appetite is unique, and as such, it is important to adequately assess the risks associated with both.<\/p>\n\n\n\n<h4><strong>Pros of buying off-plan<\/strong><\/h4>\n\n\n\n<ul><li><strong>Price<\/strong>: Buyers commonly receive a price advantage with under-construction properties priced significantly less than ready properties.&nbsp;<\/li><li><strong>Capital appreciation:<\/strong> There is a high probability of the property increasing in value near to completion and handover.<\/li><li><strong>Smaller down-payments:<\/strong> Initial deposits of 5-10%, as opposed to 25% with ready properties, can make purchase more achievable.<\/li><li><strong>Payment plans:<\/strong> Developers offer highly attractive, flexible payment plans, in some cases offering post-handover 2-5 year payment plans meaning you can actually rent the property out before commencing the repayments.<\/li><\/ul>\n\n\n\n<h4><strong>Cons of buying off-plan<\/strong><\/h4>\n\n\n\n<ul><li><strong>Changes in market conditions:<\/strong> Downward movement in prices may result in the property being valued at less than the initial purchase price.<\/li><li><strong>Delays or cancellation:<\/strong> There is of course the risk of projects being cancelled, or completed after their scheduled date. To mitigate this, it\u2019s vital to conduct independent research on the developer to verify their track record and reputation. <\/li><\/ul>\n\n\n\n<h4><strong>Pros of buying ready property<\/strong><\/h4>\n\n\n\n<ul><li><strong>Price:<\/strong> Price advantages may arise relevant to market conditions at the time. In a buyers market, it might be possible to buy a property at a significant discount. At the moment, as the market continues to correct itself and new supply enters the market causing prices to dip, buyers have the ability to bargain.<\/li><li><strong>Location:<\/strong> Ready property is often in prime locations with completed infrastructure in place.<\/li><li><strong>Immediate returns:<\/strong> You can start earning rental income from the moment a tenant is found.<\/li><li><strong>Stable rental yields:<\/strong> Investing in ready property often provides the added benefit of proven rental yields.<\/li><\/ul>\n\n\n\n<h4><strong>Cons of buying ready property<\/strong><\/h4>\n\n\n\n<ul><li><strong>Down-payment:<\/strong> In line with UAE Central Bank regulations, the minimum deposit required for expats is 25% of the purchase price for properties valued at less than AED 5 million, and 20% for nationals.&nbsp;<\/li><li><strong>Upfront costs:<a rel=\"noreferrer noopener\" aria-label=\"Upfront costs: Upfront transaction costs can be estimated at approximately 7-8% of the purchase price. (opens in a new tab)\" href=\"https:\/\/www.propertyfinder.ae\/en\/rent-vs-buy-calculator\" target=\"_blank\"><em> <\/em><\/a><\/strong><a rel=\"noreferrer noopener\" aria-label=\"Upfront costs: Upfront transaction costs can be estimated at approximately 7-8% of the purchase price. (opens in a new tab)\" href=\"https:\/\/www.propertyfinder.ae\/en\/rent-vs-buy-calculator\" target=\"_blank\"><em>Upfront transaction costs can be estimated at approximately 7-8% of the purchase price.<\/em><\/a><\/li><li><strong>Time:<\/strong> If obtaining a mortgage to finance your purchase, it&#8217;s important to take into consideration the turnaround time of your chosen bank. <\/li><\/ul>\n\n\n\n<p>There has never been a better time to invest in Dubai. Consistent new supply offers buyers a plethora of choice and continues to steadily drive prices down to more affordable levels. If you are looking to invest in affordable prime real estate and achieve strong rental yields, look no further.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n<div class=\"sharedaddy sd-sharing-enabled\"><div class=\"robots-nocontent sd-block sd-social sd-social-icon sd-sharing\"><h3 class=\"sd-title\">Share this:<\/h3><div class=\"sd-content\"><ul><li class=\"share-twitter\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"sharing-twitter-234\" class=\"share-twitter sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=twitter\" target=\"_blank\" title=\"Click to share on Twitter\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on Twitter (Opens in new window)<\/span><\/a><\/li><li class=\"share-facebook\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"sharing-facebook-234\" class=\"share-facebook sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=facebook\" target=\"_blank\" title=\"Click to share on Facebook\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on Facebook (Opens in new window)<\/span><\/a><\/li><li class=\"share-jetpack-whatsapp\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"\" class=\"share-jetpack-whatsapp sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=jetpack-whatsapp\" target=\"_blank\" title=\"Click to share on WhatsApp\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on WhatsApp (Opens in new window)<\/span><\/a><\/li><li class=\"share-end\"><\/li><\/ul><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>Investing in property is a great way to build wealth and generate income. However, all investments carry risk and there are many factors to consider before investing in Dubai\u2019s real estate market to ensure you yield the highest possible returns. Why invest in Dubai? The city offers higher rental yields than many other mature real [&hellip;]<\/p>\n<div class=\"sharedaddy sd-sharing-enabled\"><div class=\"robots-nocontent sd-block sd-social sd-social-icon sd-sharing\"><h3 class=\"sd-title\">Share this:<\/h3><div class=\"sd-content\"><ul><li class=\"share-twitter\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"sharing-twitter-234\" class=\"share-twitter sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=twitter\" target=\"_blank\" title=\"Click to share on Twitter\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on Twitter (Opens in new window)<\/span><\/a><\/li><li class=\"share-facebook\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"sharing-facebook-234\" class=\"share-facebook sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=facebook\" target=\"_blank\" title=\"Click to share on Facebook\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on Facebook (Opens in new window)<\/span><\/a><\/li><li class=\"share-jetpack-whatsapp\"><a rel=\"nofollow noopener noreferrer\" data-shared=\"\" class=\"share-jetpack-whatsapp sd-button share-icon no-text\" href=\"https:\/\/www.propertyfinder.ae\/guides\/what-you-need-to-know-to-before-buying-an-investment-property-in-dubai\/?share=jetpack-whatsapp\" target=\"_blank\" title=\"Click to share on WhatsApp\"><span><\/span><span class=\"sharing-screen-reader-text\">Click to share on WhatsApp (Opens in new window)<\/span><\/a><\/li><li class=\"share-end\"><\/li><\/ul><\/div><\/div><\/div>","protected":false},"author":8,"featured_media":1743,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[3,10],"tags":[],"jetpack_featured_media_url":"https:\/\/www.propertyfinder.ae\/guides\/wp-content\/uploads\/2019\/07\/what-you-need-to-know.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/posts\/234"}],"collection":[{"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/comments?post=234"}],"version-history":[{"count":74,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/posts\/234\/revisions"}],"predecessor-version":[{"id":1975,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/posts\/234\/revisions\/1975"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/media\/1743"}],"wp:attachment":[{"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/media?parent=234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/categories?post=234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.propertyfinder.ae\/guides\/wp-json\/wp\/v2\/tags?post=234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}