Four things to look for if you want a profitable rental property
Buying property and using it for rental purposes is a popular source of ‘passive income’ today, but since the real estate business is peppered with landmines and a single wrong decision can obliterate the returns, it’s important to do your research before investing. These days, cities like Dubai are attracting investors from around the world because of their cosmopolitan environment, modern infrastructure, zero income tax and negligible crime rate. If you’re looking for an income-generating property, here are four important points to consider:
Choose an up-and-coming neighbourhood
A property in a good neighbourhood, which is safe and has a low crime rate, will definitely attract more tenants and ensure its maximum occupancy throughout the year. Besides this, the neighbourhood demographic will significantly influence the type of tenants you attract. For example, if it’s near a university, your property will be likely to attract a large proportion of students. Golf communities such as Kensington Boutique Villas located in AKOYA Oxygen are likely to attract young couples and families because of features such as access to schools, and amenities such as quality shopping, dining and a variety of leisure pursuits.
Do your homework on property taxes
Property taxes differ from country to country, so this needs to be taken into consideration – there are consulting assessment officers who are best placed to offer information about taxation and suggest areas with low property taxes. However, the UAE is an obvious choice with its tax-free environment, unlike most countries around the world. This has made it a hotspot for foreign investors, as it gives them the freedom benefit from all of their property’s income.
Find an open job market
Locations with ample job opportunities will attract lots of people, meaning a large pool of tenants. So as a part of your research, find out the economic status of your prospect property. The UAE, and especially Dubai, offers extensive job opportunities – particularly with the lead-up to Expo 2020. According to a study by Manpower Group, around two thirds of surveyed employers wish expand their workforce in the next 12 months.1
Check out the local amenities
A property with a park, school or shops in the neighbourhood will hold great appeal. Also look for areas with a wealth of entertainment options, such as cinemas, a mall and gyms, along with good links to public transport / roads. Communities such as AKOYA’s Beverly Hills Boutique Villas offer furnished properties with golf and park views, as well as access to the Trump International Golf Club Dubai, five-star hospitality and a desert-inspired luxury spa.
The bottom line is that you’ll find investment properties anywhere and everywhere, but in order to crack the best deal, you MUST tick the above four points.
Sources: 1: Zawya: