Investing in Dubai real estate is not your ordinary investment. Compared to your normal investment, you’re investing in a city that is growing at an exponential rate and has one of the highest population densities on earth. It has the potential to offer a high return when compared to other investments, and it’s definitely worth looking into.
What’s more is that Dubai real estate investing can be done with minimal costs and risk, as well as without requiring you to be involved in costly construction projects like many other properties require.
If you’re thinking about getting into the market, here are the top three things to consider before you make your investment.
1. Location
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When considering purchasing property in Dubai, you should first think about where this property will be located. It’s important to look for a location with minimal risk. Many of the areas in Dubai that have been built on reclaimed land can experience flooding during periods of high tide and this often causes damage to homes built on these sites.
This is why it’s important to do your research before making your purchase so you don’t buy a home that will need expensive repairs or worse, one that will need to be rebuilt completely after flood damage has occurred.
2. What type of property will you buy?
When looking for Dubai real estate investment options, you’re going to have to decide between buying a regular house or investment property. Keep in mind that many residential homes in Dubai can be purchased for between $300,000 to over 1 million USD. If your budget is limited and would prefer not to spend that much money on a home, then it’s best to look into purchasing homes with less expensive structures such as duplexes and apartments instead of single-family homes.
3. How will you make your purchase?
If purchasing a property is out of the question, then you may want to look into purchasing apartments. However, you’ll have to factor in all the fees and charges that come with owning an apartment including:
Rent/Housing cost: The government does not provide any incentives for paying rent and as a result, renters are expected to pay around 7% of their income on rent every month. If you’re putting money away for retirement or starting a business, renting an apartment might be one option right now but it could be risky depending on how well the economy is performing. You could easily run out of money and end up paying too much in rent if your renovation dreams never come true.
Maintenance cost: You’ll have to pay for all maintenance costs on top of your rent amounts. These costs can include things like water, electricity, a portion of the building’s insurance, and the cost of repairs if your apartment ever gets damaged.
Legal charges: You’ll have to pay legal fees when purchasing an apartment. These fees are around 3% to 5% of the total price of the apartment.
Exit charge: If you decide to sell your apartment within two years of making the purchase, you’ll be required to pay a 2% exit charge. This is especially true if you’re planning on selling your property before it has been rented out for 2 years as well.
All of these extra costs can add up especially if you plan on renting out your property for a long period of time.
The Dunes Residence is a great place for those looking to buy an off-plan investment property in Dubai. This complex is located close to the new Dubai Canal project, which will make it a great location for anyone looking to sell their property later.