How to make money on real estate in Dubai in 2024

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 among the top 10 most developed cities in the world. We will tell you more about the opportunities to earn money in Dubai.

Content:

• Is it really possible to make money in real estate in Dubai?
• Rental business in Dubai
• Rental income in Dubai
• Apartment rentals
• Resale of apartments in Dubai
• Rent of non-residential premises
• Real estate investment in Dubai, UAE

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

The real estate sector in Dubai is exceptionally diverse. It attracts overseas investors with favourable purchase conditions, low mortgage rates in local banks, and a wide range of quality properties in both the primary and secondary markets.

The volume of real estate transactions in the emirate continues to grow, reaching 36,708 in Q3 2023, a 43.9% increase compared to the same period last year.

Government measures stimulating the local market include:

• The ability to close deals online;
• The opportunity to obtain a long-term visa by investing in real estate;
• The investor’s funds protection through escrow accounts.

Rental business in Dubai

The rental market in Dubai is well-developed, and the income from rental business here is significantly higher than in other metropolises, further fuelling investment interest in local properties.

The relation between lessors and lessees is regulated by Law No. 26 of 2007, along with special amendments from 2008 and 2013. According to this law, properties in Dubai can be leased for a minimum period of 1 year. Otherwise, it will be considered short-term rental, requiring the owner to obtain a licence. After that, the property can be managed independently or through a property management company.

Rental income in Dubai

When renting out real estate in Dubai, owners can expect an annual income of 5–13%. The specific figure depends on the type, area, and location of the property, as well as the rental format. What are the differences?

Apartment rentals

Long-term rentals

To lease property for an extended period, the owner must provide a passport and a title deed. The contract is for a minimum of one year, and terminating it without financial losses for both the tenant and owner is impossible. Income from this type of rental ranges from 5–8% per annum.

Short-term rentals

This option allows the owner to earn up to 11–13% per annum. Short-term rentals are the most attractive for passive income and quick returns. However, it requires obtaining a special licence and finding a reliable property management company to handle tenant search, check-in/out processes, and property maintenance.

Resale of apartments in Dubai

The most profitable option for resale is purchasing under-construction properties. In Q3 2023, it accounted for 63% of all transactions, totalling 22,006 transactions worth a total of AED 61.6 billion ($16.77 billion). The cost of under-construction villas reached AED 3.1 million ($844,000), marking a 63.9% increase compared to the same period last year. These are excellent figures when it comes to investments. On average, the property value in Dubai from the excavation stage to completion grows by 20–30%.

Popular areas for resale include Jumeirah Village Circle, Al Merkadh, Business Bay, Dubai Marina, and Arjan. The communities of Mohammed Bin Rashid City and Palm Jumeirah are also highly sought after.

Rent of non-residential premises

Renting out non-residential premises begins with finding a tenant. It is advisable to entrust this task to an agency since leasing commercial real estate in Dubai requires a valid trade licence. Professionals will verify the reliability of each candidate and their documents.

Typically, the minimum duration of commercial leases is 1 year, with the option to extend for 3, 5, or 10 years. The average return on such properties is 4–8% per annum.

Real estate investment in Dubai, UAE

Real estate in Dubai offers numerous perspectives for stable income. Learn how to smartly invest in residential and commercial projects in the emirate to secure your future with Emirates.Estate.