Thinking about investing in Dubai? Here are some tips to generate maximum ROI

Thu, 12 Nov, 2020

Dubai is a popular destination, not only for travel enthusiasts, but also for those looking to build their life here. As a result, the real estate sector in the region has seen unprecedented growth through the years, where magnificent cities within the city are being built and architectural marvels have shaped the landscape of this remarkable emirate.

A safe city

Dubai provides its citizens and expatriates with an immense sense of safety and security and many people who move here for work, end up staying here for the long term because of this huge advantage. Dubai consistently ranks among the top safest cities in the world. This year it landed the number 7 spot on the crowd sourced global data website Numbeo. 

Despite its diverse population, with nationalities from all around the world residing here, many expats consider Dubai to be their home. These people have spent years, or even decades, living here and building friendships and communities. Many purchase homes because they want to continue living in a country that has given them so much, especially such a safe and comfortable environment to raise a family.

A convenient location

Another appealing factor about living in Dubai is that it is centrally located in the world—between East and West and North and South—which makes it easy for expatriates to travel back home for holidays or short breaks. It also makes it the perfect place to host international exhibitions, which is a key selling point for investors. So, there are plenty of reasons why you should consider investing in Dubai. Now, how should you go about it?

It's all about ROI

Many people invest in real estate to safeguard their savings, but if done properly, one can generate a steady flow of income and ROI (Return on Investment). Basically, ROI refers to the profit one can incur on an income property versus what has already been invested in purchasing it, as well as expenses incurred to maintain it. Therefore, to a great extent, ROI plays an important role in property selection and finalisation. However, to reap maximum benefits, one needs to follow smart guidelines to ensure a good ROI. These are the key guidelines you should follow:

Conduct Thorough Market Analysis

Be it a residential property or commercial, the best way to ensure maximum ROI is to carry out detailed and thorough property analysis. In some cases, the benefits reaped may be short term, whereas in other cases it may be long term. So, gather an ocean of information from all possible sources, study the market, analyse key factors and make sure not to limit your options based on preconceived notions.

Location – a key factor

How often have you heard of the phrase: location, location, location? Where you buy your property is often more important than what kind of property you purchase. Investors and realtors alike always stress on the ‘prime’ location of their properties. What they mean is that the property is situated in a neighbourhood that promises positive economic growth, has affordable home values, has steady population growth and is situated in the midst of amenities and facilities galore to attract buyers and sellers alike. Dubai boasts of many such localities in the city limits, as well as on the outskirts. Therefore, analysing the market location is a sure-fire way to ensure maximum profitability. DAMAC offers a number of properties in prime locations across the city. DAMAC Hills, a 42-million square foot master development and Akoya Oxygen Vardon, a 55-million square foot residential community, are two of the communities that have garnered great interest from investors and residents alike.

Type of Property

Another factor that determines whether an investment is a smart choice is the type of property. Your budget will largely determine whether you buy an apartment, townhouse or Damac Hills Villas. With the help of expert realtors, you can find the appropriate fit for your budget. DAMAC is globally recognised as a market leader for its differentiated property offerings, its award-winning architectural designs and its commitment to delivering experiences across more than 100 million square feet of master communities.

Invest at the right time

When buying a property, an investor must understand that the largest expense incurred is the down payment, the monthly mortgage rates and the related maintenance expenses. Therefore, investors should look for properties when they are priced at their lowest. You should analyse the market in terms of available property listings and sold listings, and then compare the market prices before you make your choice. 

 Choosing the right rental rate

Once you’ve bought a property, generating a profit from your investment will largely depend on how you price it for rental. The rental rate an investor sets on the property will ultimately decide the fate of the investment. Typically, rents that landlords charge fall between 0.8% and 1.1% of the home’s value. Learning how to set a balanced rental rate that reflects market highs and lows is crucial to ensure your unit is rented out. If done properly, a steady and definitive ROI can be ensured.

Any investor looking to seal a real estate deal in Dubai should do so knowing that Dubai is one of the fastest-growing metropolitan cities in the world and buying property here brings a certain level of finesse to one’s investment portfolio. The presence of highly competitive realtors in the market further adds to the overall appeal. So, if you are considering to buy real estate in Dubai, then look no further. Invest in Dubai, when done right, it’s a safe bet.