Looking to buy a villa in Dubai? It’s a significant financial decision for most individuals but it is highly profitable and widely considered a secure investment option by top investors. Although villa purchases are quite common, with thousands of real estate transactions every month in Dubai, it is far from simple. In fact, a large number of transactions are conducted by buyers who have purchased property in Dubai before. Investors have figured out a strategy to getting the most out of their real estate investments and they continue to apply their formulas to ensure continued success. When it’s time for you to buy a villa in Dubai, you should also have your own strategy. These three tips are in the arsenal of every serious investor in Dubai and should help you establish your own investment strategy.
1. Market Research is 90% of the Process
If there’s one important take-away from this article, it’s this; do your research or recruit a competent real estate agency to conduct the research for you. Here are some items that all investors must look at:
Square Foot Prices in the Area
The sq. ft. price is a general number that applies to all floor plans, regardless of bedrooms. There are generally two different types of sq. ft. you should look at before you buy a villa in Dubai; built-up area (BUA) and plot area. Each should be measured against their relative market prices to get a gauge of value.
Average Occupancy Rates
Occupancy rates translate to rental yields. If properties have long turnover times between occupants, you’re expected rental income is diminished. Know this before you buy a villa in Dubai.
Average Time on Market
This is a good indicator of market demand, which will give you an idea of how long it will take to liquidate your investment. When it comes time to sell your investment, this data is crucial.
Value Trends in the Area
Capital appreciation and rental price trends are required to forecast the future value of your asset. The Dubai property market can be volatile in the short-term, so it’s important to look at longer term trends of 5 years, or more.
2. Developers Matter more than you think
This cannot be understated. Reputable developers will offer properties that mirror the standards they hold for themselves. A developers create A properties; C developers create C grade properties. Here are some indicators of a great property developer.
Quality and Integrity in Marketing
Developers that value their clients will market well; not only for themselves, but for their investor clients who will need to piggy-back off of their marketing efforts when leasing and selling their properties. Integrity in marketing is also important to consider. A developer that relies on spamming and manipulating the investor marketplace will inevitably sell you a product that does not sell itself; an obvious indicator of poor quality and poor service standards.
Quality of Construction
Investors who are experienced in the Dubai market have come to know the quality of the developers they work with. For those who have yet to buy a villa in Dubai, it is important to visit properties by the same developer and speak with the residents of said properties.
Reputable developers have made their quarterly financials available to investors who need reassurance on the financial standing of the company that has built and continues to maintain their future property. If you’re not versed in financial documents, your realtor will have an accountant that will sit down with you to review the risks, if there are any.
3. Choose a Reputable Real Estate Company
Experienced investors will have an agent who they choose to work with consistently. There is one reason for this; trust. Most agents typically charge the same fees and offer similar services, so there is little else to differentiate one realtor, from the next. A good realtor will be responsive, efficient and need little help in enacting and following up with your purchases.
If you don’t have a preferred agent here are some things to look for in a trustworthy real estate company:
Do ensure that the agent you’re working with has a signed agreement that allows them to represent the owner or developer you’re looking to buy from. Without this agreement an agent will seek out other agents who do have existing agreements. This is typically not a problem but it shows that the agent has little or no experience with your property.
Realtors need to be registered and approved by the Real Estate Regulatory Authority in Dubai to legally operate. This applies to both the company and the agent you’re working with. Always ask for both RERA numbers and look them up on the RERA Website.
Do your homework when choosing a real estate company, as when you find one you’re satisfied with you will use them for all future purchases, rentals, property management and sales. If you’re interested in real estate services or are looking to buy a villa in Dubai you’re invited to contact our property consultants here.
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