GUIDE TO BUY A PROPERTY IN DUBAI
GUIDE TO BUY A PROPERTY IN DUBAI
The Dubai real estate market features all kinds of properties, such as residences and luxury properties. Many people have become interested in investing in Dubai since the Dubai government changed the laws to allow foreigners to purchase homes and apartments in the city. The impressive potential for return on investment available in Dubai makes investing in a house there a lucrative option for ex-pats.
IS DUBAI A GOOD PLACE TO INVEST?
- The rental yields in Dubai are higher than those in most other markets. On average, investors can achieve gross rental yields of between 6-12%.
- Property prices per square foot are lower than many other cities globally, this makes Dubai an affordable location.
- In accordance with new visa laws.
- If your property is valued at more than AED 750,000, you may qualify for a 3-year residency visa(renewable).
- If you have a property valued above AED 5 million, you may qualify for a 5-year residency visa(renewable).
- If your property is valued above AED 10 million, you may be eligible for a 10-year residency visa(renewable).
- Favorable tax conditions, like the absence of property taxes and stamp duties, also makes Dubai a highly attractive investment place.
BEFORE BUYING A PROPERTY IN DUBAI CONSIDER THE FOLLOWING:
Before making any decision on buying a property for your personal use or for investment, you should consider the following factors:
- Location, Size, Quality, Market conditions, and When to buy.
- Facilities and amenities available in the community, including transport, education, childcare, etc.
- Maintenance costs
Each one of them is a precarious part on its own, and If you want to get this right, you have two options: do extensive research or consult with an expert.
FREEHOLD PROPERTIES IN DUBAI
Freehold properties are those located in “designated areas” in which non-nationals can own an absolute interest inland. These are most commonly sought by foreigners who are interested in investing in the UAE, or who plan to buy a flat in Dubai.UAE residents have access to freehold properties that are available for rental, sale, and inheritance.
Since the investor enjoys full ownership of the property unceasingly, the property can be used for any purpose. It does not require a huge amount of paperwork and consent from the state.
BUYING PROPERTIES FOR INVESTMENT AND PERSONAL USE
● Purchasing Property in Dubai for Investment Purpose
Benefits of buying a house, apartment, villa, or land in Dubai.
-Rents are high, capitalization is high, and business processes are transparent.
-Foreigners or expatriates can get a massive return on their investment. It is possible to buy a Dubai apartment at a good price by doing an analysis of the market.
● Purchasing Property in Dubai for Personal Use
Over the years, Dubai has grown to become a major real estate and business hub. Many expatriates now live in the city from around the world. Most foreign workers with blue-collar jobs regard Dubai-based properties as highly expensive and out of reach.
However, things have changed since then. Due to the easing of government restrictions, people who are employed or have a business in Dubai are now more likely to buy their own property instead of renting it.
As a result, if your main reason for buying property in Dubai is to live there, you should consider whether hospitals, supermarkets, restaurants, and schools are in close proximity. Living in a progressive city like Dubai can be a very rewarding experience for your family.
A LOOK AT DUBAI’S REAL ESTATE INVESTMENT FACTORS
When investing in Dubai’s real estate properties, location is among the most essential factors to take into account. People who are interested in investing in apartment properties or buying luxury houses in Dubai should look into the best locations to invest in real estate. Several of the prime locations in the city, such as Dubai Marina, offer a unique set of amenities that provide the means to lead a luxurious lifestyle.
Hence, investors should buy property in Dubai that can be beneficial for them. Looking for such properties can be time-consuming work; however, The real estate portfolio of Rainbow Properties includes some of the best properties in Dubai located at ideal locations that have the potential to generate a long-term return on investment for foreign residents.
● Research and Analyze Market Stats
Choosing a location can be challenging when there is a huge selection available. To learn what the best property market offers, you have to get to know the property market first-hand.
Also, as an interested investor, you can read about the current financial investment trends, predictions, and patterns and earn knowledge. The more research you do, the more benefits you can take advantage of UAE’s real estate market.
You should consider the duration of your stay in the UAE before investing in Dubai’s real estate market. You will be able to determine the total value of your potential return on investment based on this step. If you are uncertain about your long-term plans or commitments in the UAE, renting a property is the best option.
Globally, affordability is one of the most important factors that are considered when purchasing real estate property. Generally, a person’s annual housing expenses should not exceed 25 percent of their total salary. You should also budget for upfront fees, which could amount to nearly 9% of the property’s overall purchase price.
Keeping track of maintenance fees and paying annual service fees is another crucial part of owning an eminent property in Dubai.
As a result of the pandemic, the real estate market in Dubai is currently a buyer’s market, which means it is a great time to invest in Dubai if you are looking for houses and properties at discounts.
● Rental Yields
It is important to consider how much money you will be able to gain from renting out your property in Dubai. This will help you determine if the rental income will be adequate to cover your monthly payments, mortgage, and maintenance costs.
Investors can usually expect a gross yield between 5% and 9%.
● Residence Visa
You may qualify for a residency visa in the UAE if you own a property worth AED 750,000 or more. Depending on the guidelines, there may be differences.
Typically, the United Arab Emirates offers two kinds of residence visas. There is one six-month entry program. The second type of visa is a three-year residency permit. Additionally, property owners can sponsor residence visas for their families.
When a property in Dubai is valued at AED 5 million or more, has no mortgage attached to it, and has been in possession for 36 months or more, it can help potential ex-pats and foreigners obtain a residency visa for at least 5 years. This also depends primarily on specific conditions for eligibility.
THE COSTS INVOLVED IN BUYING A HOME IN DUBAI
There is a specific cost of buying a house in Dubai. You should have an idea of all the fees associated with buying a house in Dubai in advance, in order to create a realistic budget.
- Fees for NOC: In most cases, the amount is between AED 500 and AED 5000. Payments may be made directly to the developer or to the property owner.
- Fees for registration: DLD may receive nearly 4% of the total purchase price.
- Commission of the real estate agent: An amount of almost 4% of the purchase price of the property may be paid to DLD.
There could be additional charges as well, such as fees to be paid to the office of the property developer and the DLD. You might also have to pay for an entire community/building to the property developer.
If you plan on taking out a mortgage, it is important to determine the terms and terms and conditions of mortgage loans available to ex-pats and foreigners in Dubai. For the purpose of taking a mortgage, the central bank should also consider the following guidelines:
- Foreigners or expatriates who wish to invest in a property valued at nearly AED 5 million can borrow roughly 75% of its total value, while UAE citizens can borrow nearly 80%.
- If the property is worth AED 5 million or more, first-time buyers or initial buyers can borrow nearly 65% of the property’s total value. UAE citizens can borrow nearly 70% of the property’s value.
- In order to invest or purchase a second property, ex-pats can borrow nearly 60% of the total value of the property.
- Both ex-pats and UAE nationals are required to deposit 50% on properties that are off-plan.
- Buyers must not have debt-to-income ratios greater than 50%.
- Mortgages must not exceed 25 years in length. It’s because there’s an age limit (The average age range for this is 60-75 years).
- A foreign citizen can apply for a loan amount that should not exceed seven times their yearly income or revenue.
HOME LOAN OPTIONS AND MORTGAGE FINANCING FOR BUYING PROPERTY IN DUBAI
You can obtain a mortgage in Dubai without a down payment if you are short on cash. UAE banks and financial institutions offer a variety of mortgage financing options. Buying a property in Dubai can be accomplished by providing a deposit to the seller without using your own funds as a down payment. Let’s look at the current mortgage rates provided by various financial institutions:
- Emirates NBD Bank: Among Dubai’s top financial institutions, Emirates NBD provides mortgage and house loans of almost AED 15 million. The house loan and mortgages are offered up to an 80% loan-to-value (LTV) ratio. In addition, pre-approval is also available.
- HSBC: This lender offers mortgages and home loans in UAE to foreigners and expatriates with an income of AED 15,000 per month.
- Mashreq: Mashreq is another major financial institution in the UAE that offers mortgages and home loans. The company provides mortgage loans and home loans for expatriates living in the UAE who are employed or self-employed and have a monthly income exceeding AED 15,000. Expats can purchase a house in Dubai with this type of financing.
HOW TO CHOOSE THE RIGHT DUBAI PROPERTY
Here is how you can find properties in Dubai if you are a buyer interested in houses, villas, apartments, locations, and new developments:
- Go through Rainbow Properties online property listing.
- Contact our real estate agent for any queries.
- To gain a better understanding and feel of the location and layout of the property, visit it in person.
- Be sure to visit the neighborhood frequently to observe the amount of traffic and noise.
- Be sure to find out if there is sufficient parking in the property you are buying.
Some of the above factors may not be as important to you as others; however, it is advisable to check the neighborhood in the area since some parts of Dubai have less developed roads and heavy traffic.
Our goal at Rainbow Properties is to match your lifestyle, interests, and budget with the right property in your desired area.