Analysts call real estate investments the most reliable way to save money from inflation, and if desired, to multiply them. Foreign real estate is in high demand among foreign investors. One of the most popular destinations is the United Arab Emirates and the world–famous metropolis of the country – Dubai. There are more than 60 freehold zones in the city where housing is available for purchase by foreigners. You can buy a property in Dubai Hills, Palm Jumeirah, Arabian Ranches and other communities that are in demand not only as a place to move, but also as an investment.
Advantages of investing in real estate in Dubai
The real estate market of the metropolis is extremely transparent. All transactions are controlled by the Land Department. Even real estate under construction for sale off-plan in Dubai is protected by law: all funds are stored in a bank account and the developer is obliged to spend them in accordance with the construction plan. The contract of sale usually specifies the amount of the penalty that the developer must pay to the buyer in case of a delay. This protects investors and reduces any risks from buying real estate to a minimum.
Among the advantages of investing in real estate for sale in Dubai are the following:
- The constantly developing economy of the country. The metropolis has long been considered the business center of the UAE. The Government is taking measures to attract investment by developing production and increasing the need for jobs. This makes housing in the emirate consistently in demand not only among tourists, the holiday season for whom lasts throughout the year.
- Security. There is practically no crime in the country, which was achieved due to the prohibition of alcohol consumption and strict legal norms. This circumstance attracts foreigners in need of housing to the country.
- The possibility of simplified obtaining a resident visa when buying a housing stock. If you plan to visit the country for a vacation with the subsequent rental of housing, it is enough to buy a property worth over USD 204,000. In September 2021, this amount started at USD 272,742.
- Simplified apartment or apartment management system. It can be rented remotely.It is enough to use the services of licensed agencies.
- Affordable prices. Apartments for sale in Dubai can cost about the same as real estate in Madrid. If you draw a parallel with the major cities of the USA, you can make sure that housing in the UAE is cheaper. So, a studio apartment in the central communities of the metropolis can be purchased for USD 180,000. A two-room apartment can cost USD 250,000. The final price is directly related to a specific area of the city, the level of comfort and the state of the market.
- No taxation. In the UAE, it is not required to pay taxes for the use and disposal of housing stock. This allows you to get a net profit when renting out a property.
Features of real estate investment in Dubai
The purchase process is quite simple, but it differs from the usual in your home country. Therefore, knowledge of local legislation, proficiency in English or the use of the services of licensed real estate agencies is required. Specialists will help not only with the selection of the project, but also with the documentation of the transaction.
- The purchase of any residential propertyincludes four main stages:
- Conclusion of the preliminary agreement, which sets out the main terms of the future transaction.
- Conclusion of a sales agreement. It is also called «Contract F». You can get acquainted with the form on the official website of the Land Department.
- Application for a certificate of no objections. It is required for secondary real estate and confirms the fact that the seller has no debt obligations to the developer.
- Conclusion of the final transaction with the transfer of ownership. For the transfer of real estate, an appeal to the Land Department is required, where the buyer receives a receipt for payment, which must be cashed on the same day.
It is possible to conclude a transaction remotely by proxy.Although most future owners prefer to come to the country and get acquainted with the features of the infrastructure of the area and the housing stock.
What is more profitable to invest in
The investment index is consistently high for communities located on the first line of the coast. However, no agent can guarantee a consistently high annual coefficient. The global pandemic has clearly demonstrated the fact that future planning can be far from reality at any moment. However, qualified assistance at the purchase stage is still necessary. It allows you to avoid problems in the financial and legal sphere and reduce risks. Studio apartments and one- or two-bedroom apartments have the highest payback. It is in demand among those who come to work or rest. Although 2021 showed an increase in demand for the purchase and rental of villas, which was largely facilitated by the restrictions imposed during the pandemic and had a negative impact on the quality of life.
When choosing development projects for investment in order to make a profit from the rent, it is worth considering several points:
- proximity of the apartment to the sea;
- availability of nearby underground stations and developed transport infrastructure;
- proximity to cultural and entertainment places, as well as the main attractions of the area.
If we talk about buying apartments for the purpose of subsequent resale, it is more profitable to invest money in housing not too large area. It is realized faster than luxury villas, penthouses or townhouses.
Which is more profitable: to invest in off-plan projects in Dubai with a mortgage or to buy ready-built real estate
Comparing the two possible options, we can draw the following conclusions:
- Investing in ready-builtreal estate in the United Arab Emirates allows you to use it immediately after purchase and make a profit by becoming the owner of the property right, or to pay a mortgage loan at the expense of future rental payments.
- Off-plan projects require waiting for the facility to be put into operation. However, a convenient payment scheme in installments allows you to comfortably make mandatory payments during the entire construction period. Initially, the buyer can pay at least 10% of the total cost. If desired, it is possible to pay for the purchase using a mortgage.
Mortgage payments assume a long period, which allows you to repay the loan after the commissioning of the property at the expense of rental profits. The deposit for expats is set by a specific bank, but usually the buyer must pay at least 25% of the cost of real estate. Carefully read the mortgage terms and conditions. Not all banks provide for the possibility of early repayment. In most cases, this requires the payment of commission payments.
Professional assistance in buying real estate in Dubai
AX Capital is a real estate agency in Dubai with many years of experience. The company’s agents are ready to provide professional assistance with the selection of an object both for investment and a permanent stay. Only current offers from developers and owners in the UAE. You can get acquainted with the current trends of the foreign housing stock market and start choosing right now.