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- What key features should I look out for to achieve a maximum rental income on my property?
Although location is of paramount importance, it is key that the property is purchased at fair value. Other main factors to consider are good layout and finishing. Views can affect how quickly a property can be rented out. Purchasing a property in an area which has schools, parks and shops helps in seamless renting. Facilities such as swimming pools and tennis courts attract more tenants. There are a number of factors which influence how quickly your property will be rented out, although these are not the most important bases for calculating your return on investment. Service charges and the number of cheques you receive determine the math. The lower your service charges, the higher your net income; the lesser cheques you receive, the quicker you realise your income. But you have to reduce the rent when taking fewer cheques.
- How will new emerging areas affect established pockets?
Dubai's population almost doubles every 10 years. Emerging areas will continue to grow and established areas will continue to increase. We have seen the centre of Dubai shift in a southern direction over the past few years; this will continue. Established areas are constantly maintained and improved through services, landscaping and transport links. One would argue that emerging areas offer a higher return on investment as properties are available at cheaper prices, but this is only until the area becomes an established one. What tends to happen to established areas is that a pricing pattern emerges and the income stabilises. There are still two very different camps: one that wants to live in an established area and perhaps pay a little more because of this reason, and the other who does not mind living in an area that is still surrounded by construction to take advantage of potentially lower prices. The beauty of Dubai is that every area eventually becomes mature.
- When purchasing/renting a property in a particular area, is it necessary to deal with an area specialist?
Dubai is a huge market, making it impossible for one broker to know and focus on all areas at once. A broker with a lot of experience may be someone who has a lot of market insight, but an area specialist is someone who knows his own area of expertise better than anybody else. The extra edge that an area specialist provides is that he is fully updated not only about the present scenario but also about the past and the future of an area. An area becomes an arena when a specialist takes over. He knows everything inside out – layouts, features, ratings, maintenance charges, quality of buildings/villas. He does not need to check portals to identify when a good deal is in hand because he is already equipped with the price knowledge in that area. If you want a good deal, deal with an agent of your choice; but if you want the best deal, deal with a specialist.
- What are the measures taken by RERA to improve investor confidence?
RERA has become rigid in enforcing regulations that protect a buyer's exposure to off-plan projects. As per its laws, there are two major regulations for developers you should be aware of: the land on which any project will be constructed has to be fully paid up and that 20% of the construction cost of the project must be deposited by the developer into an escrow account. Any investment amount, which goes directly to the developer through escrow, cannot be used for any other reasons other than the construction of that specific project, thereby securing the buyers' funds. Additionally, RERA examines the progress of every project individually and certifies the construction progress. Details of the project's progress and completion are accessible at www.dubailand.gov.ae. Due to stringent regulations laid down by RERA, property market speculation has declined, making way for a clear and transparent property buying process.
- Question of the Week: If I am renting a property through a property management company, what measures should I take to safeguard myself?
It is natural to feel apprehensive when renting a property through a management company you are dealing with for the first time. However, there are precautions you can take to ensure you are dealing with a reputable and trustworthy firm.
I suggest you ask to see a copy of the following:
* Company's trade licence – Make sure the company name matches and the licence is still valid
* Title deed of the property you are renting – This will give you a record of current and past information of the actual owners of the property
* A copy of the actual owner's passport – You can cross-reference the details against the title deed of the property
* A copy of the agreement between the actual owner and the property management company – Again, this is an excellent resource you can cross-refer with other documents
* Check with RERA – You can also check directly with RERA whether the property is actually available
* Ultimately, make sure you are comfortable signing any contract to avoid unwanted and costly issues down the line, and always seek advice from reputable and known resources within the industry.
Ask the Agent - How does one become a shrewd property investor?
Source: Rohit Kumawat, Special to Freehold
The writer is Property Consultant - Candour Real Estate
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