Buy real estate as an investment
This guide helps investors to clarify these most important questions for themselves:
What kind of Properties for Sale in Dubai should I buy as an investment? Where should I buy a property as an investment ? Does buying a property make sense as an investment? How do I check a property and how do I find the optimal financing?
Many investors want to buy Properties for Sale in Dubai as an investment because they consider it a low-risk investment. This basically works if you pay attention to three essential factors:
- on the quality of the location,
- Finishing of the building fabric and
- over credit worthiness of the tenant.
In phases of low interest rates, property buyers also benefit from favorable financing conditions. Nevertheless, low interest rates are not the only criteria for good financing or even for a successful property purchase.
A typical behavior of many investors, for example, is to buy a property on their own doorstep, if possible. Because most property buyers trust their local market knowledge. If the focus here is on self-use of the property, that makes perfect sense. But when buying a property as a capital investment, as with any alternative investment option, the criteria of security, return and long-term value development potential must be assess primarily from regional aspects.
Tips for buyers looking to buy a property as an investment
After discussing the financial feasibility of various types of property, we will discuss the criteria that should be consider when selecting and buying Properties for Sale in Dubai a property as an investment. In order to achieve long-term and continuous rental payments, the aim is to rule out possible risks such as vacancies, disputes with tenants, special allocations for the renovation of communal property, loss of value and possible construction defects.
The rent apartment and the student apartment as an investment:
The advantage is that – unless it is a new building – you can see what you are buying. The last minutes of the owners’ meeting provide information on whether major renovations are pending in the residential complex and where there are any problems. The seller can provide information about the reliability of the tenant and the tenant can provide information about defects in the apartment during a joint inspection of the apartment . Finally, the rental agreement provides information about rent increase options.
Disadvantage: As a buyer you have to manage the tenancy yourself and carry out future rent increases and new rentals yourself. Therefore, one should familiarize oneself with tenancy law, with the implementation of utility bills and apartment inspections. Some property managers take on the tasks of special rental management for an additional fee for the property owner. But that reduces the return .
Where should I buy a property as an investment?
Rent levels and purchase prices are very different in Dubai. This has to do with the different economic strength in the regions, but also with the supply situation in the real estate market .
Although the construction costs, apart from luxury properties and special energy standards, are almost the same across Dubai, there are significant differences in property prices.
You should therefore pay attention to the location and location once Properties for Sale in Dubai . A place should have a functioning real estate market, i.e. sufficient supply and sustainable demand for real estate. If information on rents and purchase prices is easily accessible, for example because a rent index or reports on local property prices in the municipality can be call up, this is a positive indicator of a functioning market.
A good location has stable population ratios, influx and possibly even population growth. The key economic data such as average income and unemployment rate are also acceptable in comparison with the national average.
How do I determine the optimal financing for me?
On the one hand, this question is about the optimal time and your possible financing budget, which you can easily trust yourself. When building up wealth, personal protection comes first. If you have secure your individual life risks, you can take the next step towards building up your wealth. The greatest risks to life are unemployment and disability. In the next step, you should create a financial cushion for personal provision. Some monthly salaries that are sav net in a fix deposit account should not be use to finance a Properties for Sale in Dubai.
In principle, the bank will only offer financing if you have pass the probationary period as a young professional. Employees with fix-term contracts and the self-employ also find it difficult to obtain financing. As a self-employe person, you should have earn well in at least three previous years. The self-employ also need a higher equity buffer. There is no rule of thumb due to the high individual differences among investors. Here it can be advisable to have a clarifying discussion with the house bank to determine a personal financing limit.