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There has never been a better time than now to buy property in Dubai. UAE’s market is showing solid growth as the Covid-19 pandemic moves further into the rear-view mirror. At the end of 2021, we saw the property market start to rebound and as we move into the final stretch of 2022, that growth shows no signs of slowing down.
Buying property is such an important decision that it requires careful planning, thorough research, and flawless execution. If you’re looking to buy property in Dubai, then this guide will ensure that you have all of the information needed to make an informed and profitable decision.
The first thing you should do before you even think about buying property in Dubai is familiarize yourself with the local property laws. Power of Attorney documents must be signed and notarized in the country of origin. Furthermore, such documentation must be translated into Arabic. This is true for anyone outside of the UAE who is looking to buy property.
It’s best to seek expert legal advice to ensure you get these technicalities right because they could potentially cause your whole deal to fall apart.
Two main options are used when individuals buy property in Dubai – off-plan and secondary. In summary, off-sale properties are bought during development before they are ready to use. This usually comes at a discount but also carries certain risks.
Secondary property is already owned and being sold by the owner. These transactions are generally done through brokerages.
Both options have a similar buying process with only a few notable differences.
Freehold means taking full ownership when buying property in Dubai. This includes full ownership of the property and any structured build on it. Individuals who own freehold property can lease or sell it.
Leasehold property means buying the rights to live or use the property for a set period of time based on the agreement. Once the terms of the lease end, the owner retains all ownership of the property.
In the Dubai area, apartments often pay out the highest return on investment. That doesn’t mean there’s no profit to be made in other types of property, but the high population density makes apartments appealing to low-income families. This also makes buying off-plan apartments such a great option for investors.
Make sure you check the local area before making an investment though. Homes must have access to infrastructures like healthcare, transportation, and retail. This will directly impact the amount of money you’ll make from investments. the expected rental yield.
Keep in mind that yearly maintenance charges also ally. These are paid to the DLD and are based on charges outlines in the Dubai Real Estate Regulatory Agency Charge. These fees have a profound impact on ROI. Fortunately, this information is easily accessible.
Certain documentation is required to buy property in Dubai so it’s a good idea to have this stuff prepared ahead of time. Otherwise, you might miss out on a great deal! Keep in mind that this list could change so check with the Dubai Land Department to make sure you are prepared.
There are two major types of motivation when buying property in Dubai. People either buy it for personal use or they are using it as an investment. Both approaches require a different mindset.
The same factors listed above are all essential elements to consider when buying investment property. But you will need to strike a balance that meets the widest range of potential buyers or renters. Also be sure you check all of the property ownership fees that come with holding a property. They are much different for investors than they are for individuals who reside in the properties.
Here are some important considerations that you need to take into account before buying property in the Dubai area.
Location is preached in all real estate forums around the world so it’s no surprise to find it on this list. As we saw earlier, apartments generate the highest ROI due to their demand. However, surrounding infrastructure plays a huge role. Low-income families are the target market for apartments so they will need access to quality of life infrastructure. It’s not just a luxury for them. It’s a necessity.
When investing in property, it’s important that you keep track of current market trends and look for patterns. These trends change over time. For instance, we are experiencing a huge shift in boom in the market due to the Covid-19 pandemic that won’t last forever so you need to pay close attention to it. Understanding trends allows you to extract the most profit from your investments.
If you are investing in apartment or small homes in the Dubai area, then look at other comparable residences in the area to calculate the market rent. Make sure that the rental income is able to cover any fees, mortgage payments, taxes, insurance, and other maintenance requirements. You should generate positive cash flow after all of these are taken out. If the market rent in the area isn’t enough to cover those expenses, then the investment would be considered high risk.
If you are looking to buy property in Dubai, then it’s important to do your homework. Foreign investors can earn some massive income from this booming market but the laws might be different than what you’re used to. Research could save you from bankruptcy!