Two common mistakes when investing in off-plan real estate in Dubai

Property in Dubai

Navigating through apartments prices in dubai the UAE can be not an easy task if you are new to the sphere. You may encounter a number of mistakes, some of which we will look upon n this article. 

Mistake 1 – the decision to purchase real estate in Dubai is not well planned

The right approach to planning gives a significant result in the future. This seems like a simple tip, but one of the most important nonetheless. First of all, you need to understand the very purpose of the purchase: for personal residence or as passive income. This is very important, because when choosing a home for personal purposes, the buyer focuses on their own needs, but when buying investment property, you need to take into account all the factors that will be most useful for a potential tenant. In addition, if you do not set a goal in advance, then without such a plan you can get a not entirely liquid asset. In particular:

• return on investment will be lower than you expected;
• demand for rent will be minimal;
• poor location or poor quality of construction will negatively affect the possibility of a quick resale of the housing;
• the purchase of a more expensive property, which will lead to payment difficulties, and in the future to a possible loss of real estate;
• value for money that do not match.

You can avoid such moments by comparing a number of questions and answers for yourself in advance, to which the investor should know the answer at the stage of planning the purchase:

1. What is the purpose of buying off-plan real estate: further residence, resale at the construction stage or when the property is ready; long-term or short-term lease.
2. What type of property to buy: studios, apartments, villas, townhouses or penthouses. Each property has its own advantages, a certain range of future tenants or buyers, the level of investment attractiveness and more. For example, among studios and apartments, single people or couples without children are most often rented, while more spacious properties are in demand among married couples.
3. Having chosen the type of real estate for investment, you need to determine the budget itself: how much money you already have on hand, how much you need for the down payment and all related expenses, and no less important – whether you can pay the required amount on time, according to the payment plan.
4. Hire a licensed broker who will be able, based on your preferences and funds, to select the most suitable investment property option for you.
5. The quality of the developer also affects the liquidity of real estate. For example, projects from developers Emeer, DAMAC, Meraas or Dubai Properties have a high quality of development and are in high demand among experienced investors, end buyers and tenants. In addition, they offer options to purchase high quality real estate at affordable prices.
6. Location. In this case, the area itself plays a role, what kind of infrastructure it has (schools, hospitals, shops, banks, parks, etc.), proximity to attractions or places of entertainment, as well as access to public transport (metro, tram and bus stops). The presence of all these factors favorably affects both short-term and long-term rental housing.
7. It is also equally important to determine the buying zone. In Dubai, there are both freehold zones where you buy a 100% property, and areas where you can make a deal on a leasehold basis with a 99-year ownership right.

Depending on your needs and the amount of investment, you can choose investment programs of various types. All investment instruments can be divided into 3 main characteristics: security, growth and income. At the same time, it must be clearly understood that the higher the income from investments, the higher the risks, and vice versa.

Mistake 2 – missing important information to purchase

Broker’s help is mandatory both at the time of purchase / sale, and when renting real estate. But many investors and buyers often neglect the services of brokers and are faced with the fact that:

• they chose an unreliable developer who delays the deadlines for delivery or froze construction for an indefinite period;
• they buy in projects where the infrastructure has not yet been established and it is not a fact that it will be at the time of the project’s completion, since new areas and communities are developing, albeit quite rapidly, but in stages and this can take a long time;
• a poorly designed investment strategy, which can lead to bankruptcy or debt;
• a purchase through a licensed broker, which will be considered invalid in the future and you may be left without funds and without real estate.

Real estate agency in Dubai

It is recommended that even at the time of determining the purpose of the purchase and the financial component, contact a licensed agent who will help you with the entire transaction process from A to Z. In addition, without a broker, you simply cannot close a deal. Ax Capital are ready to assist you, so go over and visit their website for all the details.