How to Buy Dubai Properties
How to Buy Dubai Properties Below the Market Value?
Though I have not personally invested in Dubai properties, I know many that have.
I have also studied the real estate market in Dubai extensively as I invest in real estate locally in the USA.
However there are certain specific nuances specific to Dubai that I will cover in this discussion as well.
Can a Non UAE National Own Properties in Dubai?Not prior to 2008 or so.
The real estate boom in Dubai started around 2001.
Prior to that Dubai or the UAE Government as a whole did not allow non-citizens to own real estate in Dubai. Post 2008 the Dubai Government established certain locations where expats were allowed to buy properties.
Suddenly, investing in Dubai properties became the craze amongst property investors globally. So the answer is yes you can. Many expats are on lease however as they are only in Dubai for employment. Dubai is not really the ideal place to retire.
Should You Buy During a Financial Crisis?Recessions, financial crisis, however you want to say it typically bring property values down. Many times inflated property values are the cause of the correction. Buyers lose their jobs, can no longer make mortgage payments and foreclose on their properties.
This is the best time for a property investor in Dubai or anywhere else to step in and take advantage of the lower market prices. Historically, real estate, like any other asset, has gone up and down. So if you buy low, chances are later you will be able to sell high. It is all about the economic cycles.
Just make sure you have the capital to buy and hold for the long haul. Historically values should give you an idea of the potential appreciation you can look forward to. That said, each economic cycle is different. The advice I am giving is general and applies to my decision making process as well. However, I look at the overall situation and evaluate the underlying factors. After all, buying a property is one of the biggest, if not the biggest investment you will ever make.
Things to Consider When You Buy Dubai PropertiesLocation
Whether you buy as an investment or as a homestead (to live in), the biggest factor is LOCATION. The area you buy Dubai properties in will determine how much profit you will make when you sell it.
Pre Construction Stages
When you are ready to buy Dubai properties, look for pre construction units where you can buy the contract to the rights to buy the property. You can then sell this contract for more money to an investor or go ahead and buy the property when it is built and then rent it out.
You can do this because prices are generally lower at the pre construction stages and later catch up to market prices. If you hold on to the deal, you will experience instant appreciation when the property is built. The challenge is finding these as it can be rather tough. So get out there and network with agents so that they call you when good deals come out.
Real Estate Agents
If you are serious about investing in Dubai properties, then get out there in the trenches and network with the best agents. You want them to call you when they have a good deal. So make sure you convey how serious you are and your capability to buy.
Ask them to send you deals of high demand projects. Many times, developers are so confident that you will make money that they are willing to give you an income guarantee in the event you dont find a tenant at your desired rental price.
Gauge the agent and determined their qualifications and whether they are the best you can do business with. Find out whether the agent is a sub agent or deals directly with the developer. You want the later.
In your first few interactions with the agent, you should be able to tell if they truly understand your criteria, what your looking for and your investment objectives. If an agent simply sends you random listing and deals that do not match your criteria, then you know they are simply in for the easy money. I simply give them a warning and then stop returning their calls and delete their contacts if they continue to P me off.
Some Other Important Things to ConsiderDo not overextend yourself. You know your capabilities more than any bank can tell you. So budget and work accordingly. Target your ideal tenant. Is it the one earning $2,000 per month? Or is it the one earning $7,000 per month? As a point of reference, most Dubai expats earns between $2,000 -$5000 a month.
Look in areas closest to offices and shopping districts. Renters love proximity to where they often go because of the traffic and congestion in Dubai. It saves them a ton of time. The most commonly rented unit type in Dubai is a one to two bedroom apartment. These should rent quicker than others, should be more affordable for you and a great way to start small and build slowly.
A smaller market is the one targeting a higher salary level ($5,000 - $10,000). These tenants prefer luxury type living arrangements with pool access, gym and what not. You can definitely command a higher rent, but your capital investment will also be higher and a smaller pool of candidates available.
Then there are the high net worth individuals, company executives, celebrities etc. There is a lot of money to be made here because they dont mind paying a premium for luxury. Your ideal property investments should be luxury condos, full scale villas and sea side properties like on the Dubai Palm Island.
If you want to buy Dubai properties and make money in the long haul, I recommend starting small and building as you go. There is a lot to be learned so keep your exposure minimal while starting out and learning. You can then leverage your education as well as financial gains into bigger and better investments in the future.
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