Investing in the Dubai market
As experts predict, the market rush will not decrease after the exhibition. This event is organized to attract customers and Dubai will become more attractive to more people when the EXPO-2020 ends.
Most investors in the UAE are focused on Dubai. The local market is much more active than any other in the country. EXPO-2020 has attracted many foreign investors. It is projected that by March 2022, more than 25 million people will have visited the exhibition. This includes not only guests but also participants. Everyone needs a place to stay, which helps the owners of local real estate to earn money by renting out housing.
According to preliminary data for the last quarter of 2021, the capital growth of off-plan real estate investments in Dubai is 30% with a return of 5%. These figures are higher than in many major cities in Europe.
Renting a house for a short period is more profitable for an investor as it will allow you to reach the maximum yield of up to 11-13% per year. For comparison, when renting the same property for a long time, an investor receives 7-8% per annum.
In Dubai, there are companies specializing in the management and maintenance of properties, as well as in the search and interaction with tenants. Companies take payment for their work – about 20% of the lessee’s funds. This amount includes these tasks, as well as inspection, receiving and cleaning of premises before and after the departure of tenants.
Management companies, as a rule, prefer to work with long-term leases. For example, for 1-room apartments in Dubai Marina, you can get an average of AED 110,000 ($30,000) per year for long-term rentals.
If you rent them daily or weekly, the payment will be at least AED 367 ($100) per day. According to statistics, the occupancy rate of these apartments for short-term rentals is maintained at 75-78%.
Long-term rental of real estate can bring up to 8% profit per year. This figure is typical for prestigious areas like Palm Jumeirah, Dubai Marina, and Business Bay. In other communities, profitability can reach 4 to 7%. A lot depends on the type of housing. 1-bedroom apartments have the highest income. Villas and mansions can bring in less – up to 5% profit. To rent a house, you must sign and register an official lease agreement.
A real estate company will draw up an agreement based on the owner’s passport. The money will be credited to the owner’s account. To do this, the owner does not need to be in the United Arab Emirates.
Real Estate Crowd Funding
Crowd funding is a company that pools money from a group of investors to buy a property that investors choose.
Then, the Crowd funding company rent out that property and distribute the rental income to investors based on their capital contribution. In addition, the company can sell the property and distribute the profits on the same basis.
With Crowd funding, you can participate in buying a property in Dubai with as little as 500 Dirhams.
One of the most famous platforms of Crowd Funding in Dubai is Smart Crowd.