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I want to invest in real estate, but I’m not sure whether it’s the right time. Should I purchase now or wait?
We all know of someone or another who made the property purchase at “the right time” and ended up making a good amount of money out of it. Look back at the time they have purchased and you will realise the market sentiments at that time were probably as mixed as they are today. Uncertainty and negative sentiments usually make for a market that is ideal to pick up undervalued properties. This is the general trend. The Real Estate Regulatory Agency (RERA) has applied the highest standards of transparency to let the market function well by exercising the best control on transactions and regulating interactions between investors and real estate agents. The sheer professionalism and transparency in the Dubai real estate market encourages and instils confidence in people to invest in the emirate. The increasing number of people investing in the Dubai property market is a testimony to this fact.
I’m interested in investing with a buy-to-let mindset. Is now the right time?
Property prices have unarguably dropped during the past period. The good news is that rental prices haven’t followed suit. While some would argue that rentals in some areas have dropped by three to seven per cent, the decrease is minimal compared with the property price drop. The result is higher rental yields for the buyers, who can expect returns for their investments since the sale prices have dropped more than the rental prices, positively impacting the yield.
It is an established fact that the rental returns in the Dubai property market have been amongst the best worldwide.
When it comes to the advantages of buying a property in Dubai over investing in other markets, it is quite evident that the current options and price levels available here are very attractive in comparison with those in other popular cities.
Savvy investors now recognise this growth potential of investing here and they will soon be reaping the rewards, both in capital growth and rental return.
I’m not sure how to select the best property to fit my investment requirements. How do I start?
Engage a reputed real estate investment consultant who will assist you in finding the right property, but it isn’t as simple as it sounds.
The process involves understanding the client’s short and long-term demands. The client’s financial capacity will also be considered and consultants make sure the client understands the investment to a 100 per cent.
Your investment will have higher chances of achieving satisfying results once, with the help of a qualified consultant, you have been offered the chance to compare and contrast different options in terms of projected capital appreciation along with the typical rental yields associated with similar properties.
For property investments, Dubai offers a wide range of options to choose from. A good property consultant should be able to guide you through the process, detail the pros and cons of each development, and help you make the final choice.
I recently moved to Dubai and not eligible for a mortgage just yet. How can I secure a property? Are there rent-to-own properties available?
There are very few rent-to-own options in Dubai. However, these offer an excellent opportunity for those who are looking at staying here on a long-term basis. It enables a tenant to pay rent and purchase a property a few years later, and have a large part of the money paid for rent refunded back. Meanwhile, as an expat, you are eligible to avail yourself of mortgage loans. There are many banks in Dubai that provide attractive options. It might be worth the effort to go and meet a financial consultant or a bank to understand if you would qualify for a mortgage loan. Different lenders have their own set of guidelines or criteria to assess the client’s ability to pay back the loan amount. It would be a good idea if you only search for properties in Dubai after you have understood the loan amount that you are eligible for. This will help you zero in on the right property at the right price range.
Question of the Week
I want to invest in real estate. My only problem is time. I don’t have the time to look after my property(ies).
Again, engage a reputed real estate broker. The time-consuming responsibilities of owning a property can be easily delegated to a property broker for a fraction of your rental returns.
A broker can find you a tenant, handle tenancy contracts, receive payments and assist in property maintenance, giving you a headache-free solution to owning a property in Dubai.
The key advantages offered by the Dubai property market vis-à-vis investment in other markets lie in the fact that investors do not have to deal with complicated documentation and provisions related to income tax as there are no personal or income taxes in Dubai.
For real estate investors, the year 2016 is the ideal year to buy properties in Dubai, considering the lower price points, higher rental yields and lower mortgage rates that are currently on offer.
The anticipation is that from year 2017, the prices will start to rise at a stable pace.
Send in your property issue-related questions to be answered by industry experts, mentioning ‘Ask the Agent’ in the subject line, to: email@example.com
Source: Erick Knaider, Special to Freehold
The writer is a Property Sales & Leasing Consultant, SPF Realty