Important real estate tips to know
Buying property in any part of the world is a big decision, and a risky one if you get it wrong. But do your research and identify exactly what it is you want to get from the deal, and you’re on the way to making a tidy profit. Whether you’re planning to buy a home or a commercial property for sale in Dubai, these steps can help you make a smarter investment decision.
1. What’s the point?
Do you want to live in your property? Or rent it out? Investing in real estate is a good way to grow your wealth – if done wisely. If you want to move into your property, you’ll need to think about your requirements and if the property can evolve as you and your needs change. Is there room to extend? If so, would this be feasible? Look at other properties similar to yours and see what alterations, if any, have been done. Conversely if your plan is to rent out your property, you need to identify your target market and make sure your property will be attractive to that group.
Alternatively you could invest in a commercial space and rent it out. Whatever you choose, if your selection is right for the market you are planning to rent it to, you will receive a steady income in the form of rent, and capital appreciation on the property itself.
2. Find out the costs
Identify all of the costs involved in purchasing, and then owning, your chosen property. You may need to make a sizeable deposit and consider the legal fees, realtor commissions and registration fees. In some cases, you might need to spend money on repairs and maintenance before you can move in or rent it out. Consider having a survey done to get an accurate gauge of the condition of the property so there are no nasty surprises after you’ve bought it. In Dubai the cost is borne by the buyer – but comes with valuable peace of mind.
If you plan to rent out your property, you’ll need to consider the cost of a professional property management company. Or if you manage it yourself, do you have the skills and time to accommodate the responsibilities in your schedule?
Another thing to consider if you choose to rent out your unit is if you can afford to cover any property payments you need to make in the event you don’t have a tenant. What if something needs fixing? Determine if you need/want to carry out any upgrades and if so, set your budget. Always keep a good amount of cash in reserve to cover any unexpected costs, and ensure your tenant pays you an adequate security deposit so you’re covered if they damage anything.
There are always running costs too – real estate developers often charge annual service fees based on the square footage of the property, and of course there are the usual ongoing maintenance costs and general repairs along the way.
3. Plan ahead
We touched on this before – if you plan to move into your property yourself, can you see yourself staying there for a number of years before you might need to move? Is there everything you need nearby – or is it being planned/developed?
If you rent out your unit, are there things that would encourage your tenant to stay for the long term? A family-friendly layout, a nearby nursery/school, shops, healthcare, and so on. Some landlords are not keen to suffer what they fear will be the wear and tear on their property from a family’s use. However, families tend to stay longer term than single tenants and make a place their home, so choose your property wisely, with good amenities close by and you’re onto a winner.
4. Location is key
You always hear ‘location, location, location’ when real estate is discussed. Quite simply, that’s because it’s so important. It’s no good having your dream home, but it is set in the middle of nowhere if you need quick access to the city, for example.
Do your research on the neighbourhood – look at property types and prices, nearby amenities, if there are other things planned. Walk around and look at the residents – their age group, whether they are young with families, single career-minded individuals or older couples, that need shops and things within walking distance. Also public transport links. These are things that will hold varying levels of appeal to particular demographics.
Don’t be afraid to buy on the edge of, or close to, a popular neighbourhood – chances are the popular, higher-priced area will extend out and you can reap the benefits of becoming part of that area and able to command a higher rent.
5. The latest trends
A clever investor will keep an eye on market trends – this includes everything from the latest fashion in luxury bathroom fixtures and popular upgrades to unemployment statistics and mortgage rates. Keep abreast of things these and you’ll learn to take advantage of information and profit from it.
Luxury fittings may allow you to charge more rent for your property if the perceived value is high.
6. Understand the process
Buying property in Dubai is relatively quick and easy – anyone can do it – all nationalities and even non-residents. The whole process usually takes about 30 days.
Once you have agreed on the terms with the seller, a memorandum of understanding (MOU) is signed and the deposit of around 10% is paid. The developer issues No-Objection Certificate (NOC) – for a fee and the buyer and seller meet at Dubai Land Department to make the payment, transfer ownership and issue a new title deed (if the property is being purchased with a mortgage, the bank will need to be involved too).
Making an investment in Dubai real estate offers by damac great potential to grow your wealth. Consider the tips above, stick to your budget and plan for the long term – you’ll have a valuable asset that should net you a profit and increase in value for years to come.