Why Invest in Real Estate in Dubai? A Look at the Options and Benefits
Author: Faizan Amin
Real Estate is considered the backbone of every economy, as it brings insight about its overall prowess. Each year, we see new players, big and small, enter the real estate industry and make it big for themselves.
In the commercially evolved world that we see today, there are a lot of choices for smart savers and investors to make use of their money. Popular options include stocks, securities, businesses, saving accounts, and the greatest and most attractive option, the real estate industry.
Each industry has its own set of attraction and has the potential to benefit in different ways. But when you invest in real estate, you get to keep the major benefits which all other industries have to offer. In this piece, we will take a detailed look at the advantages of entering the property or real estate industry and the best ways to do it. Let’s begin with the advantages.
Advantages of Investing in Real Estate
There is a great set of benefits to avail for real estate investors. That is why there is a regular influx of new investors in the property and real estate sector. This industry brings the best monetary benefits with the least possible risks and complexities. Here are some of the major attractive aspects:
Using the Property
The best thing that comes with the property market, which is not present in other options like investing in stocks, is simply that you can use the property as your residence. If you are living in Dubai, or anywhere else in UAE, you can find some of the most astonishing pieces of real estate.
To shortlist the best properties available, you can simply pick out the projects developed by DAMAC, which stand out for their finesse and lifestyle offered. With such amazing real estate options available, you can not only find the best place to invest your money but also use the enviable lifestyle they offer.
Regular Earning Stream
By investing in a Dubai property, you can also maintain a continuous revenue by renting it out. This will take some smart investing as some properties and areas are more attractive for tenants, so you need to find those out.
Once you do that, you can simply sit back and enjoy risk-free and constant returns through rentals on your property. This is a great benefit of investment property which is not present in most other investing options.
As we can see around us, the property prices are always on the rise and can bring an exponential gain for the investors. Keeping the increasing trend in mind, you can easily find the best opportunity to sell off your property and make a great profit out of the deal. And then you can reinvest some, or all of the money in another property to ensure similar gains for the future.
A major contrasting point of other investments and real estate investment is that it brings you the benefits of equity. Whether you have purchased the property on cash or through mortgage, the complete or partial equity you have in the property can help you secure equity loans and business loans, which can be used for a multitude of purposes. When you have invested in any other industry, this benefit is not available.
In many ways, property investment is a very safe option for investors. In all other industries, there are abrupt fluctuations of prices, changes in regulations, and many other factors that can seriously damage all your plans for a sizeable positive outcome. With property, there are no sudden changes in prices, so you can never be troubled by them.
No Holding Costs
In a rare scenario where the property market receives a jolt which brings the prices down, or to a halt. Even in such scenarios, the investors very well know that they can simply hold on to their properties, without incurring any holding costs.
In the meantime, the benefits like regular rental income, usage of property for residence, and equity stay constant. So even if there is an adverse scenario, it doesn’t damage the investors.
In-Line with the Economy
There are very few commodities and industries that directly depict the working of any economy, and real estate is one of those few.
So when you see the property prices coming down, due to devaluation or appreciation of the currency or any other reason, you must know that it will still stay in line with the general increase or decrease of every other commodity. This way, the investors’ buying power in any economy holds its ground.
Key Aspects of Real Estate Investment
Before you choose any sector or industry to invest in, you need to carry out a detailed cost to benefit analysis to make the right choice. Any investment option can be rightly assessed by gauging it on different factors which impact the advantages and convenience of investment. Let’s take a look at these aspects and see how real estate industry scores in those areas.
The most important thing to analyse is the risk factor involved in the area of investment. For instance in stocks or any other business, there is a great chance of getting negative results in your investment, which can potentially damage your investing power or your overall financial plans.With property, the risk factor is very low as the trends can be easily analysed and there is rarely any deviation from those projections.
In the property sector, your fortune doesn’t change on a daily basis, the increase in prices also takes place over a substantial period. Real estate does not bring you daily profits, but it also saves you from the risk of losing your hard-earned money. Overall, if you don’t wish to take huge risks, you need to invest in real estate.
Need for Expertise
This is an immense factor impacting the outcome of investments. If you choose an industry or sector, which needs an expert level understanding of things to succeed, while being a novice yourself, it is a recipe for an adverse outcome which you must always avoid.
The real estate sector is such that the investors don’t need to be experts of the industry to benefit from it. You can ask for advice or follow industry trends when searching the right property, but after that, you can be at peace as your money is invested in the right place.
So when comparing different sectors for investing, the property will again come up as the most suitable choice for everyone. No matter where your expertise and talents lie, as you can be a teacher, businessman, artist, IT expert, engineer, student or anything else, you will be able to get good results out of your investment.
Ease of Investment
When you are looking for an investment opportunity, you surely don’t wish to spend more than money on it. There are certain business industries which allow such ease that you don’t have to indulge in difficult processes all day long for monetary benefits, and real estate industry tops this list as well.
In this sector, you can simply purchase a property and leave it after completing all the legal processes until you are ready to sell it off. Even if you let it on rent, you don’t have to spend your days working to get the rental revenue. This leaves you free to take care of your actual business or job while you always know that a huge monetary gain is coming through your property investment.
In most investment opportunities, one has to solely rely on his/her pocket or rarely, on the little support from the banks or financial institutions. Real estate sector is very different in this regard where you can secure up to 80-85% in mortgage loan from the bank, which mean that you effectively have to pay just 15-20% of the total investing amount upfront.
Mortgage home and commercial loans bring you an added benefit. As we know, the property prices are always on the rise, so if you try to save up for your favourite property, you can end up paying much higher prices than today. With mortgage loans, you can secure the prices offered today while paying the full amount much later through easy payment plans.
Starting as Real Estate Investors
Where there is money involved, it is better to take calculated steps. Although the real estate sector is a very secure industry to invest, calculated and well-learned decisions can help secure better returns and benefits from the invested money.
There is a lot of educational material available online ranging from articles to e-books written by learned individuals that guide about the best property decisions. You can also get support from the lawyers, property brokers and other individuals for different aspects to investing in real estate.
To get the best support, you can reach out to DAMAC Mortgage Assist team, which has experienced individuals who help potential property buyers in finding the best properties for their needs and also help them secure the most attractive mortgage finance. Let’s take a look at some of the key aspects that you should learn about before starting your journey as a real estate investor.
Type of Investment
Next thing you should look at is the investment type you should opt for. You can choose to invest in commercial real estate, which brings the added benefit of business use of the property along with monetary returns through the capital gain.
There is also the option of finding the best property to let out on rent, for which you will need to know about the average rental yields of different areas. Similarly, you can also opt for a residential property where you can actually live, while also having the relief of having secured your savings in the best possible way.
You need to make the best decision based on your financial situation, business & residential needs, and the overall investment strategy.
Best Areas to Invest in Real Estate
Be it Dubai, Abu Dhabi or any other emirate of the UAE, you will find residential areas ranging from the highest to moderate level of luxury and prices. Every area has its benefits from an investment perspective, where you can expect the varying extent of advantages through capital gain and annual returns through rentals.
For instance, if you are looking for the most lavish set of properties, which can ensure a quick gain on capital and also lucrative rental yield, then you need to look at areas like Dubai Marina, Palm Jumeirah, Al Barsha, and similar areas in Dubai. Similarly, Al Majaz in Sharjah and Al Reem Island in Abu Dhabi are considered by most high-end developments.
If you wish to invest in commercial properties, vicinities like Business Bay and Downtown Dubai have to be on top of your list. These areas are home to some of the most desirable commercial complexes, where the benefits of owning a property are immense. You can expect high capital gains, attractive rental returns, and best business prospects from these commercial properties.
If you are interested in lesser cost with higher future benefits, it is advisable to look at the developing areas like Dubailand, Jebel Ali and Dubai South. Investing in an off-plan property in these areas is very pocket-friendly as the prices are comparatively low for similar completed properties, while you also get to pay through easy payment plans offered by the developers.
Expats should know about the freehold areas in Dubai and other cities, where they can officially own property and benefit from it.
Legal Aspects and Financing Options
Along with the return related aspects, you also have to find out about the legal procedures and financing options. Along with other legalities, you have to request for transfer of property ownership at Dubai Land Departments. The total cost for registration is AED 290.
In terms of financing options, you can apply for a mortgage loan or commercial mortgage loan depending on your property type and usage. For least paperwork, fastest processing and lowest interest rates, you can make use of DAMAC Mortgage calculator. By using this service, you can invest in the top-rated projects by DAMAC in a very convenient way.
Looking at all these aspects, one can be sure that investing in real estate is the most beneficial and convenient option for utilising your money. The benefits and security of this sector are unmatched by any other industry so you can always be sure of good returns with the lowest possible risk.
By utilising the financing services offered in the UAE, you can make things much easier and attractive for yourself. All in all, one should look forward to invest in real estate in the UAE, but good research is needed for optimum results.
Frequently Asked Questions
Why to invest in Dubai Real Estate?
Dubai is one of the world’s most advanced cities with a culturally diverse population. With its ever-increasing importance as the trade and tourism hub of the region, the influx of ex-pats will continue at a good rate.
This ensures that the real estate sector in Dubai will continue to grow at a good pace, providing good monetary returns for investors in the form of capital gain and rental returns. Along with that, Dubai is a pleasant place to reside, so the property purchased can also be utilised for living.
How do I start investing in real estate?
You have to look at things as per your finances and requirements. You can easily find a lot of properties as per your budget which can help you get a good monetary return. For better results, making use of the mortgage financing options is advisable as you can then have a greater financial range to select the best properties.
How to get a loan to invest in real estate?
Getting a loan for investing in real estate is very easy and straightforward if you are living in UAE. There are a lot of banks offering mortgage loans for residential and commercial properties with varying interest rates, loan terms and policies.
The LTV ratio for expats is generally up to 80% of the property value and up to 80% for UAE nationals.All you need to do is apply for a loan at different banks and find the best deal. If you are looking to buy a property in dubai by DAMAC, you can simply apply for DAMAC Mortgage Assist to get the best interest rates and consultancy.
Is it a good idea to invest in a property in Dubai?
There are many reasons to invest in Dubai’s property market. Firstly, you get the highest returns through on reselling the property or giving it out on rent, owing simply to Dubai’s vibrant trade and tourism industry that attracts a lot of foreigners.
Along with that, the financing options and regulations are among the most encouraging ones in the world. Both these aspects, along with several more, make investing in an off plan property in Dubai a very good idea.