What To Consider Before Investing in Dubai Real Estates – Top Real Estate Company In Dubai

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What You Must Consider Before Investing in Dubai Real Estate

Want to invest in Dubai Real Estate, but feeling a bit apprehensive? You are right to proceed with caution, especially if you are a novice in this field. Investors who do not have real estate experience might get carried away and take unnecessary risks. However, when it comes to a stable and booming market such as real estate in Dubai, you have little to worry about. As long as you consider the following key factors, making the right decision will become a piece of cake. These five steps will not only help you choose the right property, but they will also set you up on the path to success as a real estate investor in Dubai.

  • Your objective behind investing in Dubai Real Estate

Before you start looking at potential properties, make sure you have a clear objective in mind. Most investors focus on the return on investment, be it through long-term capital gain or through an annual yield. The Dubai real estate market is versatile and flexible. It can accommodate the needs and objectives of both seasoned and novice investors. All you have to do is analyze what you want and decide your next steps accordingly. Do you want to buy a vacation home? Or, do you want to buy a luxury villa that you can rent out to make a sustainable income? Once your objective is clear, you will know where and how to invest.

  • The location can make all the difference

When it comes to real estate, location is everything! It is even more important to those who are looking for an investment opportunity in Dubai Real Estate. Of course, a great location means a hefty price tag, but it also means high property value, which makes it a great asset for any investor. The better the location, the higher the return on investment. However, simply choosing a popular location might not fetch you the desired outcome. The location you have chosen must also support your overall objective. What you intend to do with the property should tell you where it should be situated.

  • A clear understanding of market trends is necessary

Researching and analyzing market trends and stats is perhaps one of the most important steps that you must take care of when you are planning to dip your toes into the pool that is Dubai Real Estate. You need to educate yourself by reading up on investment patterns, current trends and future predictions. When you are confused about which location will fit your objective the most, this particular research will come in handy. You will also get to know about investment terms and other aspects that you may not have known before, and this knowledge will prove to be invaluable as you go forward.

  • The difference between expenditure and investment

Once you have taken care of the factors mentioned above, it is time to get your finances in order. At first, you need to look at your spending and savings patterns, and then do some math! Figuring out exactly how much you can afford to invest in a particular property can seem daunting. However, it is easy when you know a simple formula.

For example, if you are planning to invest and then put the property on rent, you will need to subtract the cost of taxes, maintenance, repairs, and insurance from the rent you are expecting. The sum you will be left with will be your profit or cash flow.

On the other hand, if you want to use the property as your home or holiday home, you will have to subtract the price of the property and your monthly expenses from your yearly income to figure out your cash flow.

The exact figure will certainly depend on your objective as well as the state of the market. However, internationally renowned markets such as Dubai real estate tends to produce a higher ROI than others, generally in the range of 6 – 8% per annum.

  • Guidance from the best real estate agent

Hiring a competent real estate agent is the final step in the preparation stage. No matter how well you have studied the market, it cannot compare to the industry experience of a professional. You need the assistance of someone who is familiar with the trends and developments in Dubai Real Estate. Only a reliable real estate agent can help you make the most of your investment.

With these factors in mind, you should be ready to take the plunge. Take advantage of the post-pandemic boom, and make the most of your money.

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OUR PREDICTIONS FOR Real Estate in 2021

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RiseUp holding Dubai real estate
1. Regional Ties Improvement
Real Estate In 2021 in Dubai and the world, we will notice improvements in ties within the region with countries which will bolster cross-border investments and result in further tourism and investment opportunities. This will happen due to Expo taking place in 2021 and also in anticipation of the upcoming FIFA World Cup. This will give a much-needed push to inter trade as well, which will also result in further more businesses being set up within the region, in particular due to the change in requirements for local partners in various business categories.
2. Apartments Price Growth – Real Estate 2021  Post Covid, there has been an unexpected increase in the prices for villas and townhouses, in particular in the luxury segment. This happened due to end-users preferring to have certain amenities which are only accessible in villas or townhouses for their kids to be outdoors as opposed to being indoors in apartments. This caused a strain on the prices of apartments, and due to the prices dropping within this segment, we will notice a rebound in the apartment prices this year as investors and end users alike will realise that better deals and opportunities will lie within apartments, so they will start to slowly shift their focus there. This might also result in slight adjustment of prices within the villa and townhouse community. 3. Primary Property Price Growth 2020 was the year of the Covid, and that caused a domino effect which resulted in the feds stepping in and printing money. The Feds have injected over USD 9 Trillion into the economy, which equals 22% of the circulating USD printed in just 2020. The majority of this money has gone into the stock market which has resulted in unprecedented gains during 2020. Eventually this money will move out of the stock market and make its way to properties, in particular in the hands of institutional investors, and this will give a massive boost to all primary cosmopolitan markets across the globe. 4. Further Reduction In Rentals The rental market will continue to see a drop within 2021, but it will not last the year. More tenants will shift their focus towards buying, due to the price reduction in apartments, and that will push the property prices up. Based on furthermore businesses opening and job opportunities, more migrations will happen within the region, and tenants from outer emirates will look at shifting to Dubai based on the rental opportunities, which will then in turn push the rental prices up. This will furthermore lure in investors who are looking at rental income-generating assets in Dubai.
5. Israel Investments Since the normalization of ties within the two countries, we will look at a heightened level of interest from investors in Israel to enter into the UAE market. Beachfront properties in Tel Aviv start from a range of US$ 3,000 Per Sq.Ft; whereas similar luxury properties in Dubai can start from US$ 500 Per Sq.Ft, which will make it very attractive for investors from Tel Aviv as they look at beachfront assets for holiday homes or short term rentals. The overall boost will not only benefit the real estate sector, but also technology and infrastructure.
For more information on Real Estate 2021 market in Dubai, you can reach out to us via email info@riseupholding.com or phone +97143887440.

POST-PANDEMIC: UAE REAL ESTATE WILL OFFER QUITE A FEW CHOICES

There is only one topic on everyone’s mind right now, and no points for guessing what that is. I’m going to talk about what happens next.

I believe the first noticeable change will be in our spending habits once the world goes back to what we used to term normal. Where we used to freely spend our money — hard earned or easy — we might choose to be a bit more frugal. We have realized how critical it is to have savings and more importantly, the right investments.

In addition to savings, we will start to allocate our disposable incomes to forms of investments. Global stocks have seen a decline of 25 per cent; over 50 per cent of businesses globally have come to a standstill based on national directives, which means the ideal investments are hard assets.

There are multiple reasons as to why we should be bullish on real estate. Firstly, #StayAtHome and #WorkFromHome initiatives have taught us that a good portion of our work can actually be done over emails and video conferencing. This change in outlook on work will have a domino effect on our housing choices.

INCENTIVE TO OWN in Dubai

We will choose to upgrade to bigger homes, with more open space and study rooms. This will eventually result in us choosing to own homes as opposed to renting them, as basic human tendency dictates that if we are to spend all that time, money and effort on upgrades, we would rather do it on what we own. Buyers and tenants alike have started to express interest in villas and town houses as opposed to apartment or penthouses in Dubai.

Secondly, the drop in interest rates and a higher borrowing cap of 80 per cent will allow many to enter the market. If for instance we are buying a property at an interest rate of 3.5 per cent and which is generating 8.5 per cent gross income; then we are still taking home on average 5 per cent per annum. That is still far higher than in many international real estate markets.

Similarly, tenants who have 20 per cent deposits saved up could acquire their own property, wherein the mortgage payments will replace their rental payments.

INVENTORY DROP

Thirdly, we might see a reduction in inventory of short-term rentals. I see this trend changing not only because of reduced travel, but based on the comfort level of travellers. We might opt for known hotel chains, based on our expectation of hygiene standards that will be maintained by such property networks. Or else they will be held accountable for it. This will in turn put more units in the long-term rental market, which will create healthy competition for tenants and ensure landlords with the best maintained properties will fare the best.

LIQUIDITY SEARCH

Fourthly, I feel property owners might require liquidity to fund their business or perhaps other commitments, and in the instance they are unable to raise money, they might need to exit from their real estate holdings. They will need to do so in a time-bound manner, which will be prime-time for those investors sitting with funds to enter the market at attractive acquisition values.

While this might come across, as someone taking unfair advantage out of a pandemic, this has been an unsaid rule of business — one man’s loss is another man’s gain.

The UAE government has acted promptly to reduce the negative impact of Coronavirus. RERA confirmed the move to lower the cost burden on homeowners by reducing the service charges, which will give much relief to landlords. Dubai and Abu Dhabi tenants struggling to pay their rent during the pandemic are exempt from eviction as per new directives.

These gestures reflect the leadership’s humanitarian considerations at a time when people are facing never-before-seen challenges. In times like this, the UAE has proven that it looks after the interests of the entire society. This gives its investors the confidence to further bolster their contribution to the country.

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Source: Gulf News – Written By Aakarshan Kathuria

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