Investing in Dubai real estate can be a way to obtain a document for permanent staying, make a profit on resale or earn income from the rental of property. The demand for short-term rentals in the metropolis is quite high, and the profitability can reach 10% if we are talking about housing in the premium segment. Investing in luxury off-plan properties in Dubai is characterized by numerous beneficial features. Profitability, flexibility of payments and absence of taxation are among the most attractive perks obtained by the investor.
Why invest in Dubai?
The experts strive to compare the real estate market in Dubai with other well-developed areas of Europe and the USA. However, the metropolis outshines other countries and cities in a number of ways:
- High rental rates are particularly advantageous for investors who opt to obtain passive income.
- The average income from a leasing property is about 8-10% per annum.
- Off-plan real estate is usually cheaper than the already finished property.
- Premium segment of real estate is more beneficial when buying under construction because of the low cost of a square meter.
- The laws allow investors to obtain a residence permit subject to a small number of conditions. Investing a certain amount of money in off-plan property, a buyer has the right to apply for the residence permit.
- Dubai introduces comfortable tax conditions for foreigners. In the emirate there are no property taxes and taxes on personal income. There is also no payment for land on property.
What are the pitfalls in buying off-plan?
In most cases, purchase of real estate in Dubai creates no difficulties for foreigners. However, some risks are present and may follow the transactions.
Failure of the developer to meet the deadlines
Multiple factors can influence the terms of finishing the construction. Therefore, delays are possible. To avoid such an unpleasant situation and insure yourself against negative experience, it is important to work with a trusted developer with a good reputation. Besides, it is necessary to read the contract carefully and make sure that the final terms of delivery and obligations in case of delay are mentioned.
The government regulates and controls each transaction and construction. Due to this, a buyer may rely on a thorough legal support in case of developer`s failure.
Difference between a plan and a real object
The actions and rights of a buyer in such a situation are to be discussed with the developer on the stage of negotiations and mentioned in a contract.
After the delivery of the object, a buyer has to visit the property, check and accept it. If there is dissatisfaction with the result, a potential homeowner has the right not to accept the property and make the developer perform necessary maintenance.
Fluctuations on the real estate market
Such risk is possible when buying real estate in any other country. However, Dubai in the UAE is one of the destinations of extreme demand. The experts do not foresee the decrease of activity on the real estate market in the UAE.
Due to the upcoming trend of relocation to Dubai, hundreds of expats are looking for comfortable housing now. Most of them prefer to rent an apartment or a villa. In such a way, rental real estate provides high business opportunities for the owners.
How much can be made from off-plan real estate in Dubai?
Business on the resale or lease of real estate in Dubai can only be profitable in case of serious investment into the luxury segment. Cheap objects have low profitability.
Providing apartments for short-term rentals has a higher profitability than in the case of long-term rentals – up to 15% per annum, but you need to own a premium accommodation, located near the popular tourist sites. Renting out properties for long-term rentals usually brings about 6% per annum, but the income is more stable.
To sum up
To select a profitable housing unit of a luxury segment, it is recommended to contact the real estate agency Dubai-Luxury.Property. Certified real estate agents with extensive experience are able to give useful advice on each stage of a transaction. They will coordinate the process of buying and solve unexpected issues if necessary.
