Property Investment in Dubai Real Estate Companies Guide

Tue, 2020-12-29 11:45
Author: Faizan Amin 

UAE is the regions trade and tourism capital and is known for accommodating expats from all parts of the world. Its exemplary multiculturalism and peaceful living have led to the continuous growth of its real estate sector, which is expected to grow at a similar or better pace in the future. In such a scenario, the desire for owning a property in any of its Emirates, most importantly Dubai, is totally understandable. 

Those looking for a property investment opportunity in the country don’t have to wait for years to stack up a fortune, just to find out that prices have surged even further out of their range. The UAE has flexible regulations and loan options that allow almost everyone a shot at its lucrative real estate industry without having to worry about capital at hand. 

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. 

Rental Property

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. 

Commercial Property

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. 

Property Investment in Dubai

Dubai is not only the most attractive city for investment in the UAE but also in the whole MENA region. It has a vibrant business environment with a lot of trading companies using it as their base for commercial activities. It is also a major tourism hub in the country boasting a plethora of leisure attractions and high-profile hospitality developments. 

Dubai is home to a large expat population, which belongs to different cultures and nationalities. The regular influx of people has made Dubai real estate an extremely dynamic and progressive sector. One can find a lot of real estate companies churning out extraordinary residential, commercial and leisure projects to cater the never-ending progression of the city towards becoming one of the most advanced and attractive ones in the world. 

Where Do Dubai Real Estate Companies Offer Best Investment Properties? 

Several renowned real estate developers in Dubai have delivered high-profile projects. DAMAC Properties is one of the top names in the industry with residential and commercial projects spread across Dubai and also in other emirates. Whether it be the coveted vicinities like Dubai Marina and Palm Jumeirah, or the emerging residential districts like Dubai South and Dubailand, you will find DAMAC among the developers offering best properties for investment and living. 

If you are an expat, you need to know about the rules of buying a property for foreigners in Dubai and only select areas and properties that can be legally owned. Moreover, one should also look into the different mortgage financing offers to invest in suitable properties with greater financial convenience.

Mortgage Loans for Real Estate Investment

Expats and nationals in the UAE can enjoy easy financing options to make property investments. With these loans, one can substantially increase the range of properties that can be bought, which is not always possible without financial assistance. The processes are very simple to understand and initiate for the applicants, allowing them to invest in their favourite real estate project anywhere in the country. 

Mortgage loans are offered based on the regular income and previous credit history of the applicant. Once the bank approves a certain range for price or loan amount, you can look for the properties which can be bought within that amount. The property is then held as collateral, and a convenient repayment schedule is given to the buyer. Here are some of using mortgage loans for property investment: 

  • Greater investment range with lesser upfront payment. 
  • A gradual build-up of equity which can be used for future loans. 
  • Monetary benefit through capital gains and rental yield intact. 
  • Easy payment plans spanning up to 25 years. 

Other Financing Options

Apart from mortgage loans, there are other loan types that one can use to finance current and future properties. The presence of multiple options allows the potential buyers to make the best decisions which suit their ambitions of owning properties in the UAE and also maintain a strong financial condition. 

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

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. 

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:  

  1. Consult a lawyer to help you cover all legal and paperwork requirements. 
  2. Submit the required documents in a bank. 
  3. After getting approval, select a property according to the loan amount. 
  4. 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

Conclusion

As we all know how attractive the pull of UAE’s real estate market is. Expats and UAE nationals can benefit immensely through property investments, which come in different types and also provide several financing options. The fact is that real estate investment is a highly lucrative prospect that can bring multiple monetary and lifestyle advantages for the investors, providing good value for their money which no other investment sector can offer.

As for mortgage loans, they add to the convenience and benefit of the investors. It allows everyone to invest in properties priced far more than what they can easily pay in one go. With easy instalment plans, one can conveniently repay the loan amount while also enjoy all the opportunities of earning additional revenue through rentals. The equity acquired in the property, partial or full, can also bring a lot of additional advantages for the investors when applying for equity loans. 

With all the aspects covered, we can establish that mortgage loans are the best way to invest in Dubai real estate and everyone with a sound regular earning should consider it for additional advantages.

Frequently Asked Questions

Should I buy property as an investment? 

Among all the investment opportunities present, property investment is by far the safest and most beneficial option. If you are living in the UAE, you can benefit from the rapidly growing real estate industry and get a multitude of benefits in terms of quality of living, rental earning, or capital gain. 

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.

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