If you are looking for attractive yields; Dubai is the hub for the most stable rental yields worldwide. Read on to discover the opportunities this beautiful city offers.
Property investment is considered a great tool to ensure a running income and increase your capital portfolio. Moreover, every investment comes with a risk. To minimize such risk, investors have to explore market analysis and decide which direction best suites their yield expectations.
Why put your money in Dubai and not somewhere else?
Things to pay attention to before finalizing the purchase decision
Most importantly is to look for the areas and property types that provide the highest average returns in terms of ROI (Return On Investments). It’s a necessity to conduct a market research and ideally connect to an expert property consultant who can provide you with an educational session on investing in Dubai. ROIs percentage will depend on the following aspects:
Areas in Dubai with high ROIs
A newly released analysis for newer developments such as town square, Mira, Mudon, Meydan and DAMAC hills are showing the highest ROI’s as the property costs are considered much more affordable then older units in other communities.
Some tips to increase ROIs:
A new trend in the market is holiday homes and as it’s known, Dubai is a capital of tourism and is on constant growth curve when it comes to new visitors. Furnished and serviced apartment are rented on both monthly and weekly durations. Holiday homes are offering landlords opportunity of higher returns on shorter leasing durations. The cost of the property rent highly depends on the location and the internal layout of the house but mostly the platforms marketing holiday homes such as Airbnb provide advices to landlords to make their listings more appealing to visitors.
The best optimization on residential property purchases in Dubai would be 1 bedroom apartments. As the price per square foot is cheaper than that of a studio. For example a studio in Business bay can be valued at AED1, 200 per square foot while a 1, 2, or 3 bedroom is AED1, 000 per square foot.
Pay close attention to service charges. The lower the service charges the easier it is to lease the apartment at a higher price.
The difference between off plan and ready properties
An off plan property is a development that is still not ready for delivery. An off plan can either be a project that is still on paper and only the plot for the development is purchased or a project under development with the delivery date set. The longer it takes for delivery, the higher the risk for investors and subsequently the more affordable the purchase is. The uncertainty in the success or failure of the projects and the market situation during delivery, heavily affects investor’s appetite for investing.
Ready Property are properties that are completed and ready for delivery on the spot. The market studies for ROIs are clear and the investor will have a chance to physically see the selected property before purchasing. Although a ready property is more secure in terms of investment, it is still considered a less returns investment compared to off plan. (The lower the risk the lower the returns)
The biggest real estate developers in Dubai have recently conducted a joint meeting and agreed unanimously to withhold new projects until further notice. This decision is based on the fact of recent over supply in the market compared to demand. The good news about this decision is that Dubai’s population is on constant increase. An illustration of the previous is that Dubai is on the fast lane to witness a recovery in property prices. Due to the fact that the population is expected to increase by 2021 due to EXPO and therefor a spike in demand will be present in the market. The best time to move forward with a property investment is right now!!