Dubai offers everything, from a luxurious lifestyle to growth and property investment opportunities. Buying a property in Dubai can be profitable for an investor since it has a huge scope of appreciation over time. Not just this, it is a great asset with a good rental yield of around 5-10%, which ranks highest in the world.
There were 2,702 real estate deals worth AED 10.4 billion completed in the week ending February 17, 2023. It shows the high time to invest now to enjoy better profitability before the prices rise.
But the investor must clearly understand the ROI or Return on Investment to calculate the profitability of a financial venture. Of course, the ROI depends on several factors, including location, amenities, market circumstances, etc.
So, what can be the average ROI in Dubai real estate? Well, it can be up to 10% based on the data seen through different regions in Dubai. The article will discuss tips for getting a good ROI in Dubai real estate and 10 areas that guarantee good returns.
Tips for Getting a Sound ROI on Property Investment in Dubai
As you know, Dubai has highly favorable tax conditions, making it a good investment opportunity. Also, Dubai's price per square foot is lower than other cities globally. However, there is much to consider while investing since some properties influence better returns than others.
Here are some tips for getting a good ROI in Dubai real estate:
Consider Buying an Off-Plan Property
Off-plan properties in Dubai let you enjoy a better return on investment since they are low-cost properties with feasible payment options. So, booking an off-plan property right after it is announced is a great opportunity. You can expect good returns depending on the stage you want to sell it off. Remember that the property's value rises based on its location and amenities.
Choose the Right Property Type
Dubai is filled with different property types for investment purposes. However, some property types give better returns than others. For example - More rental yields are available from smaller properties than larger ones. Not only that but renting one of these homes is more simple. In contrast, villas and large apartments have a considerably larger vacancy rate due to their higher rentals. To reduce vacancies and boost returns, it is strongly advised to invest in studio or one-bedroom flats.
Choose the Right Neighbourhood
Individuals choose to reside in areas with easy access to all their needs. Consider purchasing the home in a community near healthcare, education, and transportation services to receive the desired return on investment. Unlike in areas where necessities are far away, the vacancy rates are much higher.
Connect With a Real Estate Agent
The real estate market of Dubai is highly dynamic and is transforming the way forward because of technological advancements. Therefore, to avoid complexities and get the right deal, it is crucial to get in touch with a real estate agent who is a master of handling complexities that come your way. With their specialized knowledge and expertise, the buying process becomes creamy and helps you make the right decision.
10 Locations in Dubai That Offer Highest Returns
The demand for properties in Dubai is surging at a rapid pace. But, some areas provide a better return on investment than others. For those who are looking to buy a property, investing in these locations can be a deal:
Downtown Dubai
Downtown Dubai gives an urban community feel since it has the city's most defined architecture and beautiful promenades. Here you can expect a healthy ROI of 5-6%. It has another luxury level: convenient public transport links and access to good healthcare and cultural hotspots. Not just this, there are many different reasons to invest in Downtown Dubai, regardless of whether you want to live or rent it.
Dubai Marina
Dubai Marina is one of the most sought-after communities in Dubai due to its central location. The vibrant community offers an annual rental yield of 6-7%. It has a strategic location with a high occupancy rate of over 90%. Not just this, the place welcomes over 15.5 million visitors annually on average, making it grow and develop rapidly.
Jumeirah Village Circle
The Jumeirah Village Circle is a beautiful community located alongside Al Khail Road. Being a family-friendly community with world-class retail and shopping destination, yeah, it offers a rental yield of 5.4% which is stable and expected to rise. A mix of families, young couples, and bachelors prefer this place to live. It is a non-tourist spot and good for people who don't choose to live in heavy tourist areas.
Business Bay
Business Bay is the world's coolest neighborhood due to its central location and many amenities. Also, it is close to the main workspaces and offices, helping you save a lot of time and effort. It has the most popular building with special features, offering a rental yield of 7%. Also, you can enjoy luxurious five-star hotels, dining options, and other activities to unwind.
Palm Jumeirah
Palm Jumeirah is a gourmand's heaven, showcasing humankind's creativity. The place offers unmatched exclusivity and convenience, making it the most in-demand location for investors. Most places in Palm Jumeirah have an annual rental yield of 9-10%. It has versatile property types, world-class tourist attractions & exceptional lifestyles that one can dream of.
Jumeirah Lake Towers
Jumeirah Lake Towers is built around the edges of four artificial lakes & is a part of the new Dubai. It offers a rental yield of 7.26%. It is a large development in Dubai, opposite Dubai Marina. Buying a property here means investing in the most incredibly positioned community with a huge scope of appreciation and growth. Also, it features a pool of amenities from gyms to restaurants, making it an ideal choice.
Arabian Ranches
This is one of the safest and most gated communities by Emaar developments. Arabian Ranches feature the most luxurious villas with a rental yield of 6.02%. The place is away from the hustle and bustle of the city and is ideal for those who want a peaceful place to live. Living here offers a lot of perks, from lavish garden spaces to communal pools. The place is projected to achieve significant appreciation in the coming years.
Damac Hills
Damac Hills is a good community that has both villas and apartments starting at an affordable rate. It offers a rental yield of 6.1%. The place also has a green ambiance, outdoor activities, and proximity to major roads. Also, major developments have happened recently, and many more are to come. Therefore, considering an investment in Damac Hills is truly an investment.
Dubai Silicon Oasis
Dubai Silicon Oasis is one of Dubai's most popular localities offering a rental yield of 7%. Also, it is becoming a hub for tech startups offering a wide range of properties from studios to 3 bedrooms and access to schools and universities. Also, the place is strategically located at Sheikh Mohammed Bin Zayed Road and Dubai-Al Ain road. So, take advantage of this opportunity to have a sound investment.
Dubai Hills Estate
Dubai Hills Estate is a family-friendly community in Dubai that is quiet and secure, offering a rental yield of 6.9%. The area has a mall for recreational and leisure experiences. It has enough options, from villas to apartments, with an enhanced outdoor experience. The place is a lucrative investment opportunity since the demand and prices are always high here and are expected to rise beyond.
The Bottom Line
The average ROI in Dubai real estate is great! With its world-class infrastructure and vibrant economy, the Dubai real estate market has become a lucrative investment option for investors. The city's strategic location, attractive tax regime, and strong economic growth have made it an ideal destination for property investments.
Dubai's property market offers investors a great opportunity to make good returns on their investments due to its low entry barriers, high rental yields, and long-term capital appreciation potential. Additionally, the government of Dubai has implemented several initiatives to attract foreign investors into the city's real estate market, further enhancing its investment appeal.
It is worth noting that some investments come with a certain amount of risk. Getting in touch with a good real estate agent is ideal to minimize those risks. Since the real estate market is dynamic and prices keep fluctuating, it is important to hire a real estate agent who gives real-time information to aid you in making the right decision.
