Looking for a foreign investment? 5 tips on buying real estate in Dubai
If you are wondering where your next investment should be, the foreign real estate market is one of the main options you should consider. As promising as the prospect seems at first, a little scepticism is bound to surface. After all, when you’re investing a small fortune overseas, second thoughts about being miles away from your assets are bound to make you nervous. However, investing in foreign real estate can be a lucrative, safe and favourable option, if you keep these five key things in mind:
Safeguarding and maintaining your property
When you are thousands of miles away from your overseas property, security is a natural concern. Whether you choose to maintain the property as a holiday home or a rental, you can hire a local property management company to look after your asset while you’re away. They will aid you with security management and general maintenance, eliminating any security concerns and ensure your property is kept in pristine condition. For example, if you invest in a hotel apartment at AYKON City on Sheikh Zayed Road, your investment will be fully managed and hassle free as all reservations and maintenance will be taken care of on your behalf.
Rentals are more lucrative
When investing in foreign real estate, you need to exercise patience, rather than expect hasty returns. Consider long term profits through rental income rather than unimpressive gains through resale. Emerging international markets have extremely high rental yields, such as Dubai, which currently brings in up to 10% rental returns.
Each country has its set of laws regarding foreign investment. For example, in Dubai, foreign investors can only own property in freehold areas, which are designated by the Government, such as Business Bay, Dubai Marina, and Palm Jumeirah . Within these areas, non-national investors register with the Dubai Land Department (DLD) and obtain a title certificate legally proving their property ownership. Investors own the specific property in their name and can use it as their private residence, rent it out or sell it to another party.
Understanding the purchasing process
You can’t expect profits through investments in a foreign country’s real estate market until you are well versed with the relevant rules and regulations. Dubai real estate offers a few options for property related transactions. These include the ability to buy either ‘off-plan’ from a real estate developer or via ‘resale’ from a private seller. For off-plan, expats are required to submit their passport with a reservation form that declares the terms and conditions of the deal; whereas resale property has a Memorandum of Understanding (MoU) for this purpose. A deposit of the property price is required from the buyer to confirm his purchase.
One of the biggest uncertainties about investing in real estate overseas is that you can’t always know everything about a foreign country. Dive deep while researching and see if its culture, laws, safety levels etc fall in line with your expectations. Commission professional screenings to ensure the property you’re interested in isn’t stuck amidst a legal dispute. If you do your homework thoroughly, investing in foreign real estate can be the best decision you make – not only does it bring in extra income, but a home abroad can make for an exotic vacation!