Anyone who is going to become a landlord in the United Arab Emirates wants to know all the ins and outs of purchasing apartments. Does the process for purchasing real estate in the UAE, in 2021, differ from the process that buyers had to go through earlier, for example, a few years ago?
Since it’s our job to assist investors, we have prepared an article where we give in-detail descriptions involving all of the various stages of the purchase and sale transactions. This includes the more intricate details of when it comes to purchasing real estate.
Why should an investor purchase a property in the United Arab Emirates? While the investor can most likely answer this question for himself/herself, there are some common reasons which include, for example:
Now, such visas are issued to buyers for a period of five to ten years.
There are seven emirates in the country. The largest of all is Abu Dhabi, where the capital of the country is located. But this part is still inferior to Dubai, which is more popular not only with travelers but also with investors.
So, it was sold housing for 22 billion dollars in this city last year. The other Emirates, even taken together, have not done even half of this plan.
Investors have all of their attention currently focused on Dubai, as the local real estate market is very active right now. Evidence of this can be seen in the new buildings which are being built here and in the apartments that are being sold, resold, and/or rented out.
Also, in a few months, Dubai will welcome people who will come here to take part in an international event, namely, the EXPO-2021 exhibition.
So if we look at the number of guests that will be arriving, it’s expected to be in the millions and not thousands. More specifically, about 25 million people are expected to attend this event.
Many of them are already in the city preparing their exhibition spaces, putting up posters, billboards, and so on. In addition to this, they are also renting and purchasing villas and apartments. And only until fairly recently, has this now resulted in landlords being able to earn money on these types of accommodations this way.
Experts also predict that the excitement of this Expo will not result in a decrease real estate market. Especially, since this event has also been organized to attract both customers and buyers alike. This in turn means that after the Expo Dubai will now become even more interesting to increasingly more people.
Furthermore, it will take more than two billion US dollars to pull off this Expo, which upon closer examination is a relatively small amount to pay in the grand scheme of things.
You won’t earn much money from cheap real estate.
And while the minimum price for investors is 360 thousand dirhams (100 thousand US dollars), one should be aware that there are cheaper more affordable options out there. However, these types of options are unlikely for one to earn enough money on it, even after registering it. The main reason for this is because it won’t be so easy to find tenants or buyers for them.
The Dubai Marina.
The Emirates Living District, along with a couple of other properties that also look promising.
The Burj Dubai.
The Jumeirah District, and a few other areas.
Both of the following rights, namely, purchase with the right to dispose of the property at your own discretion and rent for a period of no more than 99 years, are also available in some other areas as well.
For long-term accommodation, you are required to sign a lease agreement with the landlord, stating your need to purchase a house.
Additionally, for the real estate company to draw up an agreement, you need to transfer the landlord’s passport to the mediator. Following this then, the money will be credited to the landlord’s account. Note that for this particular type of situation, the landlord does not need to physically be present in the United Arab Emirates.
This type of accommodation is more financially profitable for the main investor. Because this way, the main investor will be able to achieve maximum profitability of up to 11-13% per year. While in comparison, when you rent out a similar accommodation or one that’s exactly the same for the long-term, you get 7-8% per annum.
Although, it should be noted that management companies prefer to work with long-term rentals. The main reason for this is because they encounter less trouble overall. More to the point, they have less room cleaning to deal with after the eviction of each tenant and before the arrival of a new one.
Management companies also charge 20% of the funds received from the tenant for their work.
In addition to this, you can secure an average of 30 thousand US dollars per annum (if you’re renting long-term) for renting out one-room apartments in the Dubai Marina area.
Furthermore, if you rent it out on a daily or weekly basis, you can make at least $100 per day. This is great news, especially with the occupancy rate being between 75-78% here.
Before applying for a mortgage, financial institutions with the help of their own experts, conduct an expert examination of the property/accommodation. The lower the building class is, the higher the interest rate is that will be assigned to it. Incidentally, this can be up to 5.75% per annum when applying for a mortgage in dirhams. Although, this amount will be about the same in dollars because the dirham is dependent on it.
Furthermore, foreign citizens can take out a loan for the purchase of a villa or apartment at a rate of at least 2.50% per annum.
However, it should be noted that the financial institution pays no more than 75% of the mortgage loan cost. So before submitting documents to the bank, you must already have at least 25% of the total amount ready.
The owners pay for the overall maintenance of the property, which includes but is not limited to the security guards, cleaners, the upkeep of the elevators, and so on. What’s more, a landlord of a 100-square-meter apartment can easily pay about $6,000 a year for all of this in a high-level residential complex.
AX Capital is always ready and available to assist investors when it comes to choosing their ideal property or accommodation in Dubai. So whether it involves selecting your dream home or registering your apartment, we are there to support you every step of the way. What’s more, our consultants are friendly and happy to be of service to you. So if you have any questions at all, simply reach out to us by contacting our staff directly via phone or on our website. Don’t delay and start looking for your dream property/home today!