For most investors, an investment property for sale in Dubai should fulfill a few different criteria to be considered a “good investment”. Most will agree that a great return is the one goal that every investor is looking to accomplish, though there are aspects of an investment that must exist for this goal to be met. Arguably, there are actually very few investment property for sale in Dubai that would be considered “poor investments”.
The following criteria should be considered when locating the best investment property for sale in Dubai
Occupancy Rates in Dubai
High occupancy rates ensure consistently high returns, ultimately adding to your bottom line. Several variables contribute to occupancy, namely; location, proximity to metro, distance to key business areas, ease of access and rent price. An investor should inquire as to the occupancy rates of near-buy properties to get a comparable idea of future occupancy rates.
Location of Property
Location plays into occupancy rates but it also contributes heavily to rental returns and capital gains. Desirable residential locations in Dubai often see higher sq. ft. costs and higher occupancy demands by the most affluent of Dubai’s expat community. Affluent individuals are notoriously the preferred tenant profile in Dubai, for obvious reasons.
Property and Location Demand
Desirability is difficult to predict. The main factor that makes a property desirable enough to net high returns, is proximity to key amenities and infrastructure within the city. Coastal residential communities with extensively developed infrastructure statistically see the highest desirability in Dubai.
Purchase price relative to market value
Purchase price is mostly set by the market. A desirable investment property for sale in Dubai which is lower-than-market-price will see investors flocking to buy. Purchase prices may be somewhat overlooked by investors when presented with investor-friendly payment plans. Investors have the opportunity to invest in property by taking advantage of developer payment schedules. An investor payment plan catered to international investors will attract investors from around the globe.
Contractually Guaranteed Rental Yields
Guaranteed rental returns have become common in Dubai as developers obligate themselves to pay investors out-of-pocket for a set period of time after the property has been completed. Guaranteed rental returns typically net 6-7%. Property buyers benefit from a safe investment, whilst the developer reaps the benefits of the difference in a higher rental return, often profiting upwards of 4% per property.
Freehold Property Ownership
Freehold properties (properties eligible for 100% foreign ownership) are typically the best investment option for both; expats residing in the UAE, and global investors who have discovered the great investment opportunities available to them in Dubai. Freehold property, as oppose to Leasehold (maximum 99 year ownership) are made available for complete ownership, by investors of any origin, who are interested in purchasing investment property for sale in Dubai.
Property developers need to earn the trust of their investors. Developers must be absolutely dedicated to ensuring and maintaining high quality construction and finishes, on-time construction milestones, budget adherence, profitable revenue quarterlies, outstanding marketing of properties and overall transparency. A developer that keeps all of these balls in the air will attract a dedicated following of trusting investors.
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