Investment has become the need of the hour due to inflation and such other factors that are responsible for killing the value of your money. Investing in property has been a good way to create wealth by generating a regular source of income. However, like other investments, it's also not risk-free. Dubai is one of the desirable places for investors that attract them a lot. But there are certain factors that you should consider before investing in a property in Dubai to lower the risk and create good wealth within a shorter span of time.
Top things to consider before investing in Dubai
If you have also been willing to invest in properties in Dubai for a long time, some top factors to consider are described below;
1. Opting for Off-Plan Property
The off-plan property holds a good share in terms of property. The best thing about investing in off-plan properties is that these under-construction projects have relatively lower prices. Along with that feasible prices and several appealing offers make off-plan properties even more affordable than the constructed ones. It's one of the best properties to invest in in Dubai for a seasoned investor as well as a beginner investor. Both types of investors can reap better benefits with greater financial flexibility associated with off-plan properties in this city.
2.Choosing Lease Hold or Freehold Real Estate
The city offers properties in two categories; one is Freehold and the other is leasehold. The reason behind this categorization is to determine who can buy properties in this city. Any foreigner can purchase the freehold properties while the non-freehold ones can be availed by only registered GCC citizens. You can also take leasehold properties in Dubai for up to 99 years.
3. Investing in Rental Properties in Dubai
This city has a lot to offer to investors searching for rental properties. But don't forget to analyze or research the local rent yields. Moreover, it is also a decisive factor whether investors are looking for rental markets or long-term contract markets. Do your ground research about available transportation modes, and other fundamental amenities like shopping areas nearby or at the place you are planning to choose.
4. Financing Options
While investing in Dubai Real Estate, one should fully rely on their own resources or sometimes on the assistance of financial institutions. You may obtain a mortgage loan for around or up to 80-85% of the total investment amount from such institutions which can significantly bring down your initial investment payment to only around 20% or even less.
5.Taking Care of Liquidity
Though buying a property is always filled with excitement, don't forget the time when you might plan to sell it. In other words, don't neglect the aspect future while buying a property. In that case, liquidity is a must for investing in a property. Dubai offers high liquidity due to the international and domestic markets. In most areas, you might get better value for your property when you resale it. However, location, amenities, annual service charges, and condition of your property can impact real estate liquidity potential.
6. Analyzing risk component
During an investment, risk is one of the most primary aspects that one must take into account. Without a risk assessment, you can't make the most out of your investment and will end up losing your hardly-earned money. As compared to other investment ways, the property has a comparatively low-risk factor associated with it. The reason is, it's simple to evaluate the risks associated with a property and hardly there may be any deviation from your calculated assumptions.
7. Understanding the Sales Procedure
Investing in real estate in Dubai can be quite complicated if you don't do sufficient research before. Before investing in a property in Dubai, you shouldn't only know about purchasing it but it's even more important to understand the sales procedure. By doing so, you can stay away from hidden surprises and can make the better out of your investment in this city.
8. Amenities
Do look at the amenities within the property or area you are planning to buy. For instance, a large premise with an ultra-modern gym can attract people to get fit but are you sure it will work for a long time? While reselling this property, you may experience a little bit of difficulty if there is a family with adolescents or even smaller kids. So, think about it when getting into any real estate investment.
9.Property Evaluation
Before buying a property, it's a must to evaluate its value so that you can buy it at a good price. In order to evaluate the property, firstly you can talk to the agent and developer. And the other way is to do it independently by consulting a property evaluation expert or an evaluation company. After a thorough assessment, they will let you know whether the property's value lies within market expectations and better to invest for future perspective or not.
10. Fees & Additional Costs
While determining your budget or investment cost, it's not only the property cost that you should consider. There are many additional fees and costs that you will have to spend. Those costs may be mortgage costs & fees, agency fees, and some other costs. For final or closing costs, add around 8% of the property cost.
Some other hidden costs in your property may be furnishing costs, secondary maintenance costs, and other utility connection costs and fees. These costs vary as per the location, real estate development, amenities, and also type of properties in Dubai. Don't underestimate such additional costs as it can shake your budget as well as investment plans.
Bottomline
Dubai is a great place to invest as the city has a futuristic perspective. By considering the aforementioned factors, you can invest in a good property in Dubai with minimal risks. Such filters can help you reap better benefits in the coming time in your investment journey! Stay ahead in your investment journey with Dubai Housing.
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