How to make money on real estate in Dubai in 2021

How to make money on real estate in Dubai in 2021

The United Arab Emirates is one of the most economically and politically stable countries in the world. Competent management and economic diversification have brought the UAE to a new standard of living. Dubai occupies a key place in this economic miracle. This technological and ultra-modern metropolis is rightfully in the 10th place in the list of the most developed cities in the world. We will tell you more about the opportunities to earn money in Dubai.


Is it really possible to make money in real estate in Dubai?

The real estate sector in Dubai is the main direction of development so it is extremely diverse and multifaceted. Foreign investors seeking to make money in the Dubai real estate market are encouraged by the state with loyal conditions for making deals, low rates for obtaining mortgages in local banks, a wide range of high-quality properties in the primary and secondary markets, and a number of other attractive offers.

Against the background of a general decline in the market of the Middle East (about 19%), Dubai shows excellent demand for real estate. Even in the face of a pandemic, the market showed steady growth here in 2020. This is largely due to the right strategy that was promptly implemented by the government. Among the measures aimed to stimulate the market, innovations were introduced that simplifies the procedure for concluding purchase and sale transactions. These include:

  • The ability to enter into transactions for the purchase of housing online;
  • The ability to get a long-term visa when investing in real estate;
  • The ability to obtain a 3-year business license with the right for further extension.

And this is not an exhaustive list. Every year, more investors invest in real estate in Dubai and this is direct proof of its prospects.

How to make money on real estate in Dubai in 2021

Rental business in Dubai

The rental market in Dubai is quite well developed and the income from the rental business is several times higher than in other developed countries. This fact holds high investment interest in local facilities.

The relationship between the landlord and the tenant is regulated by Law No. 26 / 2007 and a special supplement. According to this law, real estate can be rented in Dubai for a period of at least 1 year. Otherwise, it will be a short-term lease for which the owner must obtain a license for hotel apartments and control the object independently, or use the services of a management company that will rent out housing under its own name.

Rental income in Dubai

When renting out a property in Dubai, the owner can expect an income of 5% -13%. This variation is due to differences in real estate categories, location features, service conditions, and rental type. The percentage for renting an apartment for a short-term period is usually higher than the rental of a similar apartment for the long term. What is the difference?

Apartment rentals

A long lease is a popular type of investment to get a passive income. The owner must provide a copy of their passport and the right of property ownership in order to start renting out housing for a long time. A long-term lease contract is concluded for at least a year and it is impossible to terminate it without financial losses on the part of the tenant and the owner. The income from this type of rental costs 4-6% per annum.

A short lease allows the owner to earn up to 11-13% per annum. A short lease is the most attractive option in terms of getting passive income and quick payback. This is due to the high demand for housing during the holiday season in Dubai when the rental costs rise in proportion to the demand.

To start renting out housing you need to get a special license and find a good management company that will take on all the obligations associated with the search, settlement, eviction of tenants, and maintenance of real estate.

How to make money on real estate in Dubai in 2021

Resale of apartments in Dubai

According to the latest information, real estate sales reached their peak in Dubai. It numbered 4,643 transactions for March 2021, totaling $2,900,000,000. This figure has become a record for the last 6 years. And this is not the limit!

While foreign buyers are actively investing in their future and sales are gaining momentum, investors are making the most of the benefits. Now is the most suitable time for profitable real estate resale transactions.

It is important to take into account the current demand to optimize the time to find suitable real estate for resale. Now the focus is on ready-made housing – 63% (2930 transactions) compared to housing under construction – 37% (1713 transactions). It is also important to consider the area. Townhouses and villas in Mohammed bin Rashid City, Dubai Marina, Palm Jumeirah, and Jumeirah Village are of great interest at 11.5%, 9.3%, 7.2%, and 8%, respectively.

Rent of non-residential premises

The lease of non-residential premises begins with the search for a tenant independently or with the help of an agency. A contract is signed with the tenant in which all the important points are clearly spelled out, including:

  • Rental price;
  • Terms of rental of premises and payment;
  • Lease term;
  • Lease renewal terms and conditions;
  • Additional expenses during the operation of the property and their distribution among the participants of the transaction;
  • Liability for violation of the terms of the lease agreement.

This method of getting income is stable and reliable. Usually, the contract is signed for a period of 10-15 years during which the owner receives 6-10% per annum and the tenants cannot move out earlier without paying a significant fine.

How to make money on real estate in Dubai in 2021

Real estate investment in Dubai, UAE

Owning real estate in Dubai opens up many prospects for stable income for an owner. You can learn how to properly invest in Dubai’s real estate with Emirates.Estate to ensure your happy future.

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