Investing in the UAE’s real estate is favourable because of low tax levied on the property buying and selling alongside tax-free rental yields. Although all kinds of investments carry the risk of depreciation, studying, evaluating, and following property investment guide with expert advice can help you mitigate that risk. The UAE has one of the flourishing real estate markets in the world, with a high return on investments (ROIs). That said, it attracts buyers and sellers from multiple countries and diverse income brackets.
There has been a significant increase in property investments with government-backed data and policies. Moreover, a wide range of options is available in real estate. For instance, buying and renting houses to create an extra income source.
Here are some of the tips for investing in property in the UAE that will help you earn a higher return and ease your investment process.
Tips for Investing in Property in the UAE
The essential rule before investing is to enhance your knowledge about the market, research the prospects and evaluate the risks. Let’s find out all the tips for investing in property in the UAE and how to make the best out of your investment.
DETERMINE YOUR OBJECTIVE
It is essential to understand why you should invest in real estate. Decide whether you will live in the property you buy or rent it to earn extra income. Your decision will also help you invest in the right neighbourhood. Moreover, determine the types of properties you want to invest in according to your lifestyle, i.e. villas, apartments, studios or hotel apartments.
MARKET RESEARCH
One of the property investment tips in the UAE or around the world is to carry out complete market research. You can refer to the Dubai property sales report of H1 2022 to find the Emirate’s top neighbourhoods, luxury, and affordable apartments. Moreover, you should be aware of the following types of property ownerships when you are investing in the UAE:
- Freehold areas such as Dubai Sports City and Palm Jumeirah are allocated for non-resident or foreign investors.
- Non-Freehold areas such as Al Barsha only allow locals and GCC (Gulf Cooperation Council) nationals to own property in these areas.
- Usufruct properties in the UAE are kinds of freehold apartments. Expatriates can buy residential or non-residential properties of this kind but can’t make any changes to them.
- Commonhold properties are freehold apartments such as Dubai Marina and Jumeirah Heights that you can buy, sell, rent or inherit. Property owner and building residents need to pay maintenance fees to the building owners.
- Leasehold properties for instance Dubai Silicon Oasis are leased for 99 years giving the rights of property to the owners but once the period is over the right of the properties go back to the freeholder.
Besides, an essential tip to invest in property in the UAE is to know which area is more likely to yield a maximum ROI or high rent values. Knowing the type of property and strategising accordingly can help you minimise the property investment risk in Dubai and other Emirates.
SET A BUDGET
The investment budget depends on your objective and evaluation. It is essential to set a budget when buying a property in the UAE. If you are dealing in cash, you need to make sure you have money when you are signing the agreement. Besides, if you are looking for a mortgage, get the pre-approval and save money for the down payment. That said, ensure that you know everything about the types of mortgages in Dubai and other Emirates when you are planning to buy your property on the mortgage.
Moreover, there are fees of regulatory authorities, for instance, DLD charges 4% of the property value. That said, the buyer or investor will be required to pay those fees along with the complete cash payment or down payment in case of a mortgage.
CONSULT AN AUTHORISED REAL ESTATE AGENT
Real estate regulation authorities such as Real Estate Regulation Authority (RERA) in Dubai and Real Estate Regulation Department (RERD) in Sharjah have authorised real estate agents. That said, consulting a real estate agent can help you find a suitable property with a good neighbourhood and also ease your property buying process.
Moreover, you can check the broker card or confirm from the Dubai Land Department website if the agent is authorised or not.
PROPERTY LOCATION
Location plays an important role in buying an apartment in Dubai or any other Emirate. An essential tip to follow when investing in property anywhere in the world, including the UAE, is to find a locality near schools, hospitals, supermarkets, public transportation, and parks. That said, it will create convenience for you and result in better selling and rental values.
KNOWLEDGE ABOUT DOCUMENTS
You will require certain documents such as Emirates ID or Passport to invest in property in the UAE. Ensure you consult the right real estate brokers and regulation authorities’ websites to learn about the required documents. Alongside, the following documents are required mainly when buying or investing in a property:
- Property title deed
- Buyer and seller ID
- No objections Certificate (NOC) from builder or developer
- Bank letter (for the mortgage)
- Last utility bill payments
Knowing about all the paperwork can reduce your hassle at the time of investing. Besides, you can rent an apartment in Dubai or any other Emirate where you want to invest in real estate. Renting will help you learn about the neighbourhood, rental values, and processes in the meantime.
These were some of the important tips for investing in property in the UAE. Whether you buy a villa in the UAE or any other residential or commercial property, make sure you follow these tips to maximise your ROI.
Keep reading the UAE’s leading property blog to learn about different real estate authorities and property buying tips to ease your investment process.
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