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The procedure for buying property in Dubai, UAE is relatively simple and affordable, although it has unique features. According to experts, property buyers should determine their goals and evaluate their financial capabilities. It is necessary to approach the choice of a property wisely. Ideally, before entering the market, it is worth studying the unique aspects of local legislation and the specifics of concluding transactions. However, if you work with a reputable expert, this process will be much easier.
The strengthening Dubai economy is increasing the value in the real estate market, creating the ideal conditions for buying property. Many foreign investors are now more willing to invest in this country and take advantage of the economic and tax environment in the UAE. If you are new to this market but are pondering whether or not to buy an apartment in Dubai, this article will show you the key points regarding property transactions, which will help you avoid common mistakes later.
Content:
- Top mistakes Dubai real estate buyers make
- Tips for successful real estate purchase in Dubai, the UAE
Top mistakes Dubai real estate buyers make
Legislation ignorance
Laws regulating the real estate market in the UAE are quite strict and differ from other countries. In order to avoid mistakes, it is wiser to utilise the services of an independent expert who will inform you of all the subtleties and help you to make a deal correctly.
Haste in making decisions
When buying property in the UAE, particularly in Dubai, haste is your main enemy. Do not rush to sign documents and pay with cheques under the influence of emotions. Buying property is a huge decision that requires a lot of capital investment. That is why it is necessary to approach decision-making with a level head and carefully think over every aspect.
The hype in the Dubai real estate market is a current trend that is likely to continue for several more years. Dozens of deals are made here every day. Real estate units are quickly bought up, whether they are secondary housing units or in a new development. However, it is important not to be overwhelmed. There will certainly be an apartment that is destined to become yours, but it will be extremely difficult to return money that has been invested in a hurry.
Unclear reasons for purchasing
A common mistake is to consider real estate purchased for the purpose of generating income to be a possible option for personal occupency. These goals shouldn’t be combined. Investment property should bring a guaranteed recurring income, and this is the only reason why it is interesting. If you’re not going to live in this apartment, you shouldn’t evaluate it based on your personal preferences.
As a rule, permanent and year-round rental income is brought by long-term tenants, that is, the people who live and work in this country permanently. They look at rental property and its location in a different way, unlike tourists. Look for apartment towers that are in demand by locals or ex-pats living in the city. If you earn an income from tenants, you can rent a home you like in any city, or country.
Tips for successful real estate purchase in Dubai, the UAE
Set your goal
Before buying a house in Dubai, you need to clearly understand the purpose of this purchase. This will help you understand what type of property you need and what important features you should pay attention to first.
A potential investor or a real estate buyer should answer the following questions:
- What investment term are you considering: short term or long term?
- What kind of return on investment do you expect?
- What kind of property do you prefer, already commissioned or can you wait until construction ends to save money?
Based on this, you will be able to understand what properties, with what specific characteristics should be looked for, including in what area, the layout and with which interiors.
Don’t hurry to make decisions
Take the time to understand the real estate market structure, study as many offers as possible to make sure that you are making the right choice.
If you’re going to buy an investment property, consider all the factors. What rental yield can you expect from a property? Is this area in demand and will it be popular later? Is the residential community well developed and what is located near it? Is there convenient transport accessibility to reach other districts of the city easily? What amenities are there for residents to use?
Study the property
Studying a property before buying it is a must for those who are interested in the reliability of their investments. If the property requires minor repairs, communication lines replacement, or there are other details you would like to change, it is important to specify this in the contract, in advance. After the money is paid, further changes to the housing and the elimination of technical shortcomings will become the buyer’s responsibility.
Study the documents
Due to ignorance, some buyers tend to make one of the most common mistakes of not checking or properly understanding the document before signing it. This is especially true for documents for any depositing of funds. In the UAE, the importance of a signature cannot be underestimated. If you sign a document, whether it be a cheque or an agreement, then you are already financially responsible.
Signing a document means taking on the corresponding obligations. Neglecting the significance of this action, without a proper analysis of the property and, accordingly, the papers you sign, you risk facing great disappointment and possible problems.
Study the Title Deed
The title Deed is the name of the deed of ownership. This is a title document, which contains all the information about the property, including information about the owner, location, and property area.
Before entering a transaction, verify the authenticity of the seller's ownership. You can check it in the application or on the official website of Dubai Land Department.
The average waiting period for the title issuance in Dubai is one to two days. After buying a property and receiving your Title Deed, double check the correctness of the information indicated on it, particularly the name of the owner - its spelling must match the spelling in their passport. Otherwise, there may be problems later with the confirmation of your real estate ownership.
Calculate all expenses
Novice buyers should also understand that the cost of the property and the deposit are not the only fees that will be expected when buying property in the UAE. There are basic costs, and there are additional fees for registration and mortgage insurance
Transaction-related fees are primarily paid by the buyer and typically range from 6% to 7% of the property price. The payment to the land department is 4% of the property price under the contract, plus 0.25% of the loan amount in the case of you taking out a mortgage.
There is an additional fee of AED 2,000 ($545) for properties under AED 500,000 ($136,000) and AED 4,000 ($1,090) for more expensive properties to register a purchase.
