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Thinking about buying an investment property? Here are a few things to consider

Flip it, rent it or live in it… let’s explore the ways you can benefit from purchasing a property.

You may have grown up hearing advice about how real estate is a great way to build equity and seeing how you’re reading this very article right now - It’s something you’re considering.

Below is a breakdown of why investing in real estate is a good idea, particularly in Dubai and a few things to keep in mind when you’re ready to get started.

Investor vs. homeowner

While you can be both, there is a distinct difference in the objectives for your purchase.

If you’re buying a property you intend to live in, you’d be considered an end user (homeowner).

If you plan to rent it out to tenants or resell in the future, you’d be an investor.

Today we’re zooming in on properties as an investment with the intent of renting it out as an additional source of income or flipping it to sell for profit rather than living in it yourself. (#majormoneymoves)

Things to consider when investing in property

Be hands-on: If you’re the type of person who prefers a hands-on approach to investing then property investments are perfect for you. It requires you to be more involved across all stages of the investment process compared to other forms of investment. From financing it to managing the repairs and maintenance along with interacting with tenants who occupy your property.

The waiting game: Property investments are for the long term, taking out a mortgage loan would involve up to 30 years to pay off. Value appreciation of your property may take a while so the ROI and profitability of your investment won’t happen overnight. However, it is one of the safer assets to invest in compared to cryptocurrencies.

Recurring income: With these in mind, investing in property remains attractive for its appeal as a source of recurring income. If rental payments from your tenants exceed the expenses to maintain your property, this will result in positive returns.

Value increase: Good things come to those who wait and the same goes for properties. Most of the time, a property’s value appreciates and will continue to appreciate year-on-year. Giving you the opportunity to resell at a higher price than what you originally paid for.

Why invest in Dubai: a city of innovation

Dubai positions itself at the forefront of innovation and has been making positive moves in digitizing various sectors, notably in real estate.

The Dubai Land Department has recently rolled out multiple initiatives centered around data transparency and access to analytical insights on properties for investors. Dubai is providing global investors with a secure real estate experience, elevating itself as a premier investment hub internationally.

Tax free haven: Buying property in Dubai means zero taxes! Annual property tax, income tax, capital gains tax don’t apply here. Increasing its appeal for investors. As a property owner, you’ll only be asked to pay the one-time registration and property transaction fees.

High returns: As a high yield market, Dubai property investments experience a higher ROI compared to its global counterparts. This is partly due to the nonexistent property taxes and property prices experiencing an increase at the moment. As a young market, there is a high potential to gain profits from reselling your investment property in Dubai.

Golden Visa: If you invest in Dubai real estate, depending on the value of your property, you’re eligible for the 10 year Golden Visa. This allows you to reside in the UAE, gain access to Dubai’s social services and sponsor your spouse, children and parents.

Now that we’ve explored the various things to consider when investing in a property, you’re already one step closer to your investment dreams! You can now slowly begin the hunt for your ideal property and build up the funds to get there.

Written by Ysabella Louise Manlangit

Published on 19 October 2022

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