Best places to buy investment property in Dubai 2021
Author: Faizan Amin
Property and real estate have always been on top of the list for potential investors seeking benefit and security. All large and small investors can make it big by choosing this sector over other options. Not saying that all other industries don’t come with advantages of their own, but the mix of benefits and attractions offered by the real estate market is unmatched so far.
All those looking to buy property in Dubai are usually aware of the amazing advantages it can bring. Be it gain on investment or rental yields, the numbers produced by the Dubai property market are big enough to attract all potential investors, whether they are UAE nationals or expats.
The property prices differ greatly when you move from one area to another, which means that the industry allows investors with different capital strengths to find an investment property that ideally matches their budget and requirements.
Best Property Choices in Dubai
Dubai is a big city that accommodates locals and expats from different walks of life and offers diverse residential choices. No matter what price range, facilities, locality or lifestyle you are looking for, you will find several options to suit your needs. Let’s take a look at some of the major property types offered in good numbers in Dubai.
Dubai is home to countless villa communities offering a diverse range of living options. If you are looking for villas, you will have a huge choice with a lot of villa compounds located in all parts of the city. The options include developed and off-plan villa communities that offer good security and facilities for residents. You can find a lot of options of Dubai villas for sale with varying prices, locations, and features.
If you are looking for the most futuristic villa communities for living or investment, you must take a look at the villa settlements developed by DAMAC in Dubailand.
These villas projects are part of two ultra-luxurious mega communities, DAMAC Hills and AKOYA, with each villa setting bringing its own set of features in terms of design, living style and furnishings. As these villa communities are present in Dubailand, which is a developing area of the city, they are among the hottest properties to buy in Dubai at present.
Just like villas, you will find a huge variety of apartments for sale in Dubai offering great value for money in terms of living and returns. There are old bustling areas like Bur Dubai, Deira, and others with a plethora of apartment buildings, along with the sumptuous vicinities like Dubai Marina, Jumeirah Lakes Towers, Jumeirah Beach Residence, Al Sufouh, and others offering luxurious and pleasant living standards.
No matter which area you choose, it has its advantage for the residents, but as there are potential tenants for all apartment categories, investors can always be sure of continuous and attractive rental yields.
The prices vary immensely when you move from older areas to newer ones, which also reflects in the rental prices of apartments. As there are a lot of expats coming in from all over the world, they tend to find studios for rent in cost-friendly areas.
But as there is always a need for luxury as well, there are a lot of takers for newer areas, even though, the average rent in Dubai Marina and similar areas is higher than several other districts. So all in all, investors can find living and earning opportunities depending on their pocket and requirements.
Setting the luxury bar even higher, there are a lot of luxurious residential towers offering well-crafted penthouses on their topmost floors providing amazing views of the beautiful city of Dubai. These units are come with great facilities, making them ideal for living. As the rents are high along with the occupancy rate, they also turn out to be great investment prospects in terms of capital gain and rental yield.
Being the business hub of the region and one of the most commercialized cities in the world, Dubai is home to some of the most high-profile commercial developments. There are some internationally renowned commercial towers in areas like Business Bay and Downtown Dubai.
Barsha Heights, Al Barsha, and Al Quoz also offer some amazing commercial properties that include offices, retail shops, showrooms, and warehouses. Goes without saying that one can find some great choices according to the target price and other requirements.
The benefit of owning a commercial property in Dubai is that the city offers a great business environment, so if using for your own business, you can expect a great start. If you only wish to earn rental income and capital gain, you will find them score well in this aspect as well.
Types of Property Investment
When you make up your mind to invest in a property, you now have to choose between multiple alternatives different based on their usage and benefits. As every person has different financial standing and needs, so naturally the preferences are also different. Let’s take a look at some of the major property investment types so you can weigh their benefits and costs as per your situation and requirement.
A general investment type is to buy a property and let it for rent. This investment type is ideal for those who already have their residential needs sorted out and have additional money or financial strength for further property investment. It is also ideal for expats who are living without family and don’t need large living space. So the property owned can be rented out while a cheaper rental option can be used for residence.
Advantages of Rental Property
- Ensures a regular stream of revenue for the investor.
- Yields capital gain when the property is sold off.
- Can be bought through home and commercial mortgage finance.
Investors can also look to buy commercial property like office, shop, showroom or industrial land. A major benefit is that the investors can use these properties for their own businesses, which can result in monetary benefit.
While the property also serves as a safe investment for the money and bring additional benefit in the long run. Those looking to invest in commercial properties can find a huge variety of options with different prices and features.
Advantages of Commercial Property
- Capital gain when the owner decided to sell the property.
- Brings regular revenue through business gains or rent.
- Can be bought through a commercial mortgage loan.
Residential Property (For Living)
Residential properties can serve the dual role of keeping your money safe for a future capital gain and also provide a place to stay, which allows escape from a substantial cost of renting a place. All the emirates in the UAE have many suitable residential areas, where you can pick a residential property in Dubai based on your lifestyle aspirations and budget.
Advantages of Residential Property
- No more burden of rental costs.
- Capital gain whenever the property is sold.
- Can be partially rented out for revenue.
- Can be acquired through mortgage loans.
Off Plan Property
Investing in an off-plan property is a great idea due to the advantages it can bring. There are a lot of under-construction residential projects that boast of amazing facilities and amenities for residents. Off-plan projects are almost always more modern in terms of their planning and living standard, so one can be better off investing in these projects instead of the current ones.
Benefits of Off-Plan Property
- Usually, come with convenient payment plans.
- Priced lesser than completed projects of a similar standard.
- Offer greater capital gain due to lesser initial prices.
- Can be rented out when complete for regular revenue.
Best Areas for Property Investment in Dubai
As already discussed, every area in Dubai has a distinct set of characteristics, so as an investor, you can shortlist them based on your own interests. Let’s try and divide the areas according to similar characteristics so one can find the most suitable ones for their needs.
High-End Central Areas
These areas will fall under what is called New Dubai. Mostly located in between Sheikh Zayed Road and Sheikh Mohammed Bin Zayed Road, these areas are home to Dubai’s most prolific residential, commercial, and leisure developments. These include well-known vicinities like Dubai Marina, Palm Jumeirah, Al Barsha, Al Sufouh, Jumeirah Beach Residence, and Jumeirah Lakes Towers.
All of these areas deliver the highest level of luxury and convenience with a lot of amenities and connectivity with other areas. With these areas, you can expect to find the most expensive of properties, with equally good returns from an investment perspective.
These areas are followed closely by popular vicinities like Jumeirah Village Circle, Jumeirah Village Triangle, Jumeirah Golf Estates, Barsha Heights, and several others, which also fall between the same major highways and provide an impressive lifestyle. They have a comparatively lower price bracket and offer good value for money.
Old Residential Areas
The older areas like Al Nahda, Bur Dubai, and Deira are situated in the northwestern part of the city, closer to the neighboring emirate of Sharjah. These are the areas where development first began in Dubai and provide an insight of its earlier days.
A major aspect of these areas is the large number of expats that reside here, which also reflects in the diversity visible in the dining options and places of worship. The older, cultural souks and shopping centers also grace these areas.
Though these areas are slightly further from the central and important areas of today, they are easily accessible and also have their own set of amenities and options for education, shopping, dining, healthcare, and leisure. With these characteristics, these areas provide a low-cost living and investment opportunity for all.
The most important commercial centers in the city are Business Bay and Downtown Dubai. Featuring some of the most well-known developments like the Burh Dubai, Dubai Fountain, and the Mall of the Emirates, the region covered by these two commercial districts should be on top of the list of investors.
With a lot of commercial and residential towers surrounded by amenities, these areas provide a desirable residential, commercial, and investment option. The prices are on the higher side, but then again, they are totally reasonable given the rental yield, business opportunities, and living standard offered.
Along with new and old areas, there is a cluster of areas in Dubai that have been recently set-up or are still under development. The most prominent areas which are sure to become the most important ones in the future include Dubai Silicon Oases, Dubailand, Dubai Festival City, Jebel Ali, and Dubai South.
Dubai Silicon Oases is deemed to be the most technologically advanced area in Dubai, with well-planned commercial, residential and leisure projects in dubai that score high on their tech aspect.
Dubai South, being the location for the Expo 2020 site and Al Maktoum International Airport, is a major future prospect. Dubailand is a vast area with completed communities like DAMAC Hills and Akoya.
It is among the most attractive investment prospects in the city, as it is expected to be among the most important areas of Dubai in the years to come. So those looking for a huge capital gain after some time can invest their money in these areas.
Best Property Investment for Expats
Expats living in Dubai will be delighted about the fact that there aren’t any legal barriers for them to invest in Dubai property. All they have to make sure is find out about the freehold areas in Dubai, which welcome investment from non-residents and residents alike. All the major areas offer freehold properties.
Invest in Dubai Property with Mortgage Financing
Given the benefits and desirability attached to Dubai, one might think that investing here will be an uphill task. On the contrary, making a real estate investment in Dubai is quite easy owing to the flexible regulations and presence of financing options.
There are a lot of banks offering easy mortgage plans for commercial and residential properties which makes it extremely easy and beneficial for all to purchase property here.
If you have regular earning, through a salaried job or a private business, you can easily secure a mortgage loan to buy a property in the UAE. There are advantages of investing in property through bank finance, major ones include:
- Multiple Financing Options
- Escape from rental payments
- Benefits of equity
- Earning through capital gain and rental yield
- Eligibility for Dubai property visa
With these benefits, one should definitely opt for mortgage finance to buy property in Dubai.
Financing Options for Investing in Dubai Property
If you have made up your mind to purchase a property through bank finance, you now have a choice of different types of loans offered in the UAE. Each type suits different situations and purposes and has a distinct set of advantages. Let’s take a brief look at these choices to understand what each type brings to the table.
Mortgage Home Loans
This financing model is very easy to understand and utilize. The buyer is provided with a loan of up to 80% (up to 85% for UAE nationals), which is then held as collateral by the lending bank. The property owner has to pay off the loan and interest in the form of easy installments.
If you are looking to invest in a commercial property or a residential one that you plan to rent out, then you can apply for commercial mortgage finance. A major advantage of these loans is that the expected earning from the property is taken into account, not your current income, so you can also end up receiving a much greater loan by applying for a commercial mortgage.
Commercial mortgage works in almost the same way as mortgage financing for residence. The major difference is that the property has to be used for commercial purposes like business or rental earning. What makes it easier and more beneficial is that the expected revenue to be generated by the property is taken into account, on basis of which the loan is sanctioned.
Let’s put it that way, you can secure a greater loan what your current monthly earning is eligible for, purely based on the fact that the property in question will generate revenues to pay off the loan. This helps with:
- Greater loan amounts
- Earning through rentals or business processes
- Increase in equity without burdening your own pocket
- Future benefits based on that equity
Equity Home Loans
An important loan type which you should be aware of investing in Dubai property. Inequity loans, the complete or partial equity you have in a property are held as collateral to sanction loans. You get to receive cash which can then be used to service existing loans, upgrading current property, or buying a new one. Equity home loans can help you manage your properties and cash flow well if used smartly.
Equity home loan is a vastly different financing tool compared to the first two. In this model, you can secure a loan based on an existing property, completely or partially owned by you. The loan is approved and the property is held as collateral, leaving you free to use the money for any purpose you find suitable.
These loans can also be used to pay-off ongoing mortgage loans, which can help secure greater equity in quick time, for buying additional property, for business, or any other purpose that the receiver finds suitable. The advantages of equity home loans include:
- The utilisation of existing equity, so other financial indicators can be ignored.
- Opportunity to invest in Real estate, through paying off current loans or acquiring more property.
- Easier management of your financial needs with additional cash.
Things to Know for Expats
If you are an expat living in Dubai, you can easily invest in and own a property in the city. But as there are some legal and financial aspects involved, one should always gather as much information as possible to avoid any inconvenience. Here are some of the things you should know before you set out to find the best investment options in UAE for expats.
Loan to Value Ratio
As an expat, you must always be aware the LTV offered to UAE nationals and foreigners is different. Most banks offer a home loan rates of up to 85% to the nationals and up to 80% to expats. So you should always expect to pay about 20% of the price and select the property accordingly.
All property deals and loan applications are governed and monitored by Dubai Land Authority and Real Estate Regulatory Agency. It is important to read up on the Real Estate Lagislation to be aware of all legal aspects and be prepared before you finally apply for a mortgage loan or go into a purchase deal.
How to Apply for Mortgage Financing?
As mortgage financing allows immense convenience and greater choices for potential investors, they have to be considered instead of looking to pay the full amount for the property.
If you are worried about applying for the loan or the registration processes involved, you need not worry as the process is quite simple and convenient.As for the regulatory policies of the Dubai Land Department, you can easily read about them online or consult a lawyer for guidance.
Here are all the steps for property investment via mortgage loans:
- Consult a lawyer to help you cover all legal and paperwork requirements.
- Submit the required documents in a bank.
- After getting approval, select a property according to the loan amount.
- Pay the advance amount to the bank and follow the repayment plan.
It is as simple as that. If you are looking for an even easier journey, you can contact the experts at DAMAC Mortgage Finance. They can help you get through with the lowest paperwork requirements, handle the legal procedures and also get you and calculate the lowest mortgage rates for any DAMAC property.
Dubai property investment is a great idea as it brings great returns for all. Owning a property in the financial nucleus of the region ensures great rental yields and exponential capital gains for the investors.
You can choose from multiple property types, according to your investment or residential requirements and budget. Moreover, different areas in Dubai offer a distinct combination of amenities, pricing, returns, and other aspects.
Expats can also take the opportunity of Dubai property investment and reap the benefits of this vibrant industry. Although, it is known that it is quite costly to own real estate in Dubai but one doesn’t need to give up on this dream, as there are different financing options available for all.
These loans offer an amazing opportunity for everyone living in Dubai to get their hands on a desirable property in the city and benefit from the lifestyle or monetary benefits it offers.
Frequently Asked Questions
How to invest my money in real estate in Dubai?
Dubai offers a lot of choices for potential investors entering the market. One can choose from different property types in various areas that offer different benefits. You can also apply for mortgage finance or commercial mortgage to invest your money more smartly and beneficially.
Is it a good time now to buy real estate in Dubai?
A very important thing to understand about the property investment industry is that it is always a good time to invest. Especially, when talking of Dubai, one can always expect the industry to continue its positive trend despite all odds to give a positive return to the investors.
Dubai has a booming trade and tourism industry, with expats coming in good numbers from around the world. With Expo 2021 around the corner, it is the best time to invest in Dubai.
What are the benefits of buying a property in Dubai?
There are several advantages of buying a property in Dubai. The benefits mostly depend on the property type and purpose of investment. Keeping these factors aside, some standout benefits of investing in Dubai property include multiple loan choices, end of rental costs, benefits of equity, attractive rental returns & capital gains, and the opportunity to apply for a Dubai property visa.
How can I get permanent residence in Dubai?
You can get a residency visa in Dubai in a number of ways, One of them is by owning a property in Dubai.
You have to make sure that you find a freehold property that is valued over AED 1Million and purchase it via full payment or mortgage financing in which you can depend on mortgage calculator by DAMAC to help find out the best offer.
It has to be noted that the residency visa is valid for two years, which can be extended when needed without any hassle.
How much money do you need for an investment property?
It depends on the property you are looking for, as prices vary depending on the type of the property and its location. If you are looking to invest through a mortgage loan, you will get a home loan amount range from the bank or financial institution.
You can keep that range in mind when looking for suitable properties and find the best one. You also need to consider that Down payment to be made, which is at least 15-20% of the total property price. This can give you an idea of how much you can invest.
Why buying a house is better than renting?
When you rent a house, the money you are paying doesn’t help you in the long run. When you buy a property, either through full payment or mortgage financing, you make an asset for yourself which can yield monetary and other benefits for you.
You can earn on the capital gain when the property is sold, use the equity to get loans approved, or apply for residency based on the property. There are countless factors that make buying a house better than renting.