How to make money on real estate in the UAE in 2024?

How to make money on real estate in the UAE in 2024?

2024 promises to be a year of growth in the real estate market of the United Arab Emirates. The economy is reviving, new interesting developments are being built, and investors from all over the world are interested in how to make profitable investments and save their money in 2024. Emirates.Estate experts answer these and other popular questions.


The potential of the United Arab Emirates

The UAE has a huge economic potential and is of great interest to business people from all over the world. The increased interest of investors is due to a combination of factors:

  • No taxes on property ownership. When buying real estate in special freehold zones, you become the full owner and can manage your purchased property in any way you choose; sell, donate, rent it out, or completely abandon it. At the same time, the property is not taxed by the state.
  • Issuance of resident visas. According to state policy, The UAE does not issue passports to foreigners, but there is a convenient alternative of a resident visa. It can be can be obtained by investors who purchase real estate as well as foreign citizens who have lived in the UAE for a certain number of years.
  • Control of transactions at the government level. Local authorities understand the need to attract foreign investors so they support businesspeople and strictly comply with legal standards. The developer can also act as an authority in conducting transactions in these instances.

How to make money on real estate in the UAE in 2022?

Dubai's prospects

Abu Dhabi is the capital and largest of the 8 Arab emirates. Despite this, in terms of real estate sales and the development of urban infrastructure, Dubai is ahead of it by a significant margin. This is indicated not only by speculative observations but also by statistics. A total of $22,000,000,000 in transactions were made in 2019. This enormous figure almost doubled the sales in all other emirates.

Unsurprisingly, Dubai is the center of attention now. The real estate market remains active with new buildings and key infrastructure being built. To date, about 300 infrastructural facilities are being built for a total of more than $ 40,000,000,000.

Dubai EXPO 2020

The World Expo was scheduled for October 2020 but it was forced to be postponed to October 2021 due to the ongoing pandemic. In order to preserve and promote it, the organizers kept the original name as a sign that the exhibition was not canceled but merely postponed.

This truly global event aims to attract the attention of investors and expose the beauty and glory of ultra-modern Dubai to the world.

Despite its grand scale, the Dubai Expo is only part of the plan to attract and retain foreign capital. The Government of Dubai has prepared special plans that will coordinate the economic development of Dubai for the 2030s-2050s.

Popular areas of Dubai for investment

There are several areas with great investment prospects in Dubai. They are attractive from both a tourist and practical point of view. They are comfortable places for permanent residence.

The most popular places for buyers and tenants are close to the water located by the sea or directly in the sea.

Palm Jumeirah

The artificial Palm Jumeirah Island is the center of luxurious real estate in Dubai. The high quality of the facilities and its unique location has made this place one of the most popular in the UAE with tourists and tenants. That is why buying a house in Palma Jumeirah is an investment with a guaranteed payback.

Dubai Marina

The 1st place belongs to the Dubai Marina in the ranking of the most popular areas of Dubai. The area is made up of skyscrapers, luxurious hotels, restaurants, and entertainment parks. Tourists from all over the world come here to enjoy comfort and luxury, relax on the cleanest beaches, and admire spectacular views. A wide range of housing will not leave even the most fastidious buyers indifferent.

Downtown Dubai

Downtown Dubai is the cultural center and heart of Dubai. Despite the fact that Downtown is the smallest area of Dubai (with an area of 2.5 km2), the enormous scale of housing is breathtaking. The largest developments in the city are located here such as the Burj Khalifa, the famous fountains of Dubai, and the Dubai Mall. Buying a house in Downtown Dubai is a cherished goal of not only foreigners but also many local residents.

Despite the high cost of housing in the above-described areas, their prestige, exclusivity, and comfort steadfastly hold the attention of the entire international community and remain in demand in the UAE housing market.

How to make money on real estate in the UAE in 2022?

Dubai real estate market

The Dubai real estate market is amazing not only for its enormous scale but also for its guaranteed profitability and stability. These fundamental factors make Dubai an interesting investment location.

Over the past few years, the Government of the Emirates has been actively engaged in stimulating the national economy. First of all, measures were taken aimed at mitigating and simplifying requirements for doing business outside the freehold zones, and removing the restriction for banks’ lending real estate (in the amount of 20%). Government fees and the cost of annual rent in commercial real estate have been reduced in order to mitigate the pandemic’s effect.

About the price

You will need $100,000-$360,000 to enter the Dubai real estate market. This is an approximate amount that investors should focus on. Of course, there are options with significantly lower values than the specified one (from $25,000-$30,000) but they do not have high investment potential. At the resale and rental stages, difficulties may likely arise that will not allow you to get maximum returns.

On the other hand, if the investor is not deterred by this or if they plan to rent an apartment, cheaper housing is a great alternative. Many visitors need affordable housing so these offers will always be in demand and, in one way or another, bring the owner benefits.

Long-term real estate rental

Renting out for the long-term is a popular practice with investors in the UAE. There is a rule in Dubai that no commission is charged to the owner if they deferred control of a property to a management company. The funds are charged to the tenant and usually the amount of this commission does not exceed 5% of the rent. Agreements with the tenant are specified in the contract which is available for download on the official website of the government. This contract protects the interests of both parties.

You will need a passport and ownership to start renting out long-term housing. You can manage your cash receipts remotely and you don't have to be in the UAE.

The contract is usually concluded for a year, during which the tenant cannot move out of the apartment. Otherwise, he will have to pay a fine. On the other hand, the owner has the right to evict the tenant but not without financial losses for him/herself.

The rent fee can be divided into several parts – the owner should discuss terms and conditions in advance with the management company. This can be a one-time payment for a year in advance or regular contributions every 3-4 months.

Short-term real estate rental

This option is the most attractive for investors because it allows you to get the maximum benefit of up to 11-13%.

The owner needs to get a 1-year license worth $600 and get the support of a reliable management company to start renting out short-term housing. This is extremely important because the company is responsible for the safety, cleanliness, neatness, and tidiness of the apartment before and after the tenants' settlement. Usually, management companies withhold 20% of the amount of all funds paid by tenants for their services.

How to make money on real estate in the UAE in 2022?

How to choose a promising property in Dubai?

Finding a good, potentially profitable property for a stable income is not an easy task for an uninformed person. The age of the building (apartment in secondary housing or a new residential complex) is an important parameter in real estate. Residents prefer housing in a new building with well-thought-out and well-designed infrastructure and all the benefits of the city nearby. Therefore, the loan-to-deposit ratio for these apartments is much higher.

The district itself is important too. Housing on the outskirts is much cheaper and, in these cases, the quality matches the price. There are also some problems with resale in the future. In this matter, you should not chase a low price but rather give preference to those areas that have long established themselves.

Learn more about mortgages

Self-checking of real estate is a common practice for UAE banks. The lower the bank evaluates the real estate, the higher your loan rate – up to 5.76% AED. In terms of the dollar, the rate will be approximately equal. The lowest interest rate on loans for foreigners is 2.5% per annum. Depending on the cost, the bank can finance up to 75% of the sale price.

Real estate maintenance

This is not typically paid. The owner of the house pays for the maintenance of the house and land, its security, the maintenance of elevators, the cleaning of corridors, etc.

Investment in real estate in Dubai, UAE

Real estate in Dubai can be reliable help for those who are looking for additional sources of income or are striving for financial viability. Discover new opportunities for your own development today! Learn more about real estate and investments in the UAE on Emirates.Estate.

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