Things to Know Before Buying Property in Dubai

Dubai is a desirable place for real estate investors because of its stable market, tax advantages and high returns. Besides that, its fascinating lifestyle, advanced living facilities and sophisticated living ambiance also attract investors from all around the globe. However, real estate investment in Dubai can be a daunting task. One needs to consider the following points and seek the services of a professional to explore the potential of Dubai’s property sector.

Buying a property in Dubai is not an easy job. Many people are not quite as prepared as they should be in order to get the most feasible option for their real estate investment. If you are also planning to invest in Dubai’s real estate sector then this guide is quite helpful for you to understand what are important considerations to buy in Dubai and what are the pros and cons of buying property in Dubai.

Things To Consider Before Buying Property In Dubai:

Identify your objective

It is crucial to identify your objective before investing in the property sector. There can be any reason. Some people buy an apartment for personal use and some buy it as an investment. Whatever objective you have regarding an investment, you must be very clear. It will help you decide what type of property resonates with your objective and will also enable you to define your needs and budget.

Measure Your Affordability Range 

Real estate investment in Dubai requires an extensive amount. Measuring your financial conditions or affordability range must also be included in the checklist for buying property in Dubai. Assess factors such as cost factors that also include insurance, home fees and property taxes to realize your financial outreach. Assessing these costs will also assist you in drawing a clear line between what you can afford and what cannot.

Locations

The most important factor to consider while investing in the real estate sector of Dubai is the location of a property. Your objective will also help you analyze the importance of a specific location from a different angle. The location of a property is the most significant point that needs due attention during the investment process. Always invest in a property that is located at a prime location and is easily accessible from other areas. 

Legalities Involved During The Process

It is crucial to get the services of a real estate agent in Dubai to carry out real estate transactions.  Your transactions must comply with set standards and regulations. First of all, you should know for how long you will live in Dubai. It is important to estimate your investment returns. Furthermore, you need to consider the affordability factor. A global norm is that your monthly housing expenses should not be more than 30% of your income or salary. 

What Investment Options Do You Have?

Dubai offers a range of investment options. Locals and even foreign investors can invest in real estate.  

Freehold Properties In Dubai

There are some designated areas in Dubai where foreign nationals are allowed to purchase real estate and enjoy complete ownership rights of their purchased properties.

Leasehold Properties

People can also invest in leasehold properties. This form of investment only grants the buyer the right to the unit, not the land it is built on. It gives 99 years of ownership rights of a purchased property.

You need to understand these investment types and choose the most suitable option and the one that defines your real estate objective. Consideration of factors such as investment objectives, long-term plans, and risk tolerance can help you decide the most suitable option.

Off-Plan vs Ready Property

Off-plan property vs Ready Property? Off-plan property is a property that is still under construction and is yet to be completed. However, the ready property is a completed one. Both have different perspectives. Buying off-plan property is easy but it involves delayed occupancy. On the contrary, ready properties in Dubai require high upfront payments and you can instantly move to ready properties after purchasing them.

Mortgage Pre-Approval Letter

It is better to get a mortgage pre-approval letter before starting your property-finding journey. A bank issues this letter after evaluating your financial conditions. If it finds your documents satisfactory then it issues a mortgage pre-approval letter that defines your financial outreach or mortgage limits.

Mortgage Categories In The UAE:

A mortgage or property loan helps you purchase a residential or commercial property in Dubai. There are different kinds of mortgages available in the UAE: Fixed-rate mortgages and  Variable-rate mortgages. 

The interest remains the same for a specific period if you seek a fixed-rate mortgage. However, interest rates normally depend on Emirates Interbank Offered Rates in the case of variable-rate mortgages. A fixed-rate mortgage provides stability and predictability as people know exactly how much they need to pay each month. Variable-rate mortgages can change periodically.

Fees For Buying Property in Dubai:

The Dubai Land Department (DLD) normally charges 4% of the sales price as transfer fees. However, one has to pay AED 430 for a plot, AED 40 for an off-plan property and AED 580 for apartments and offices.

Registration Fees

Do not forget to consider the registration fee for a property in Dubai. It is ED 2,000 plus 5% Value Added Tax for properties worth lower than AED 500,000. For properties that are valued above AED 500,000, the registration fee is 4,000 plus 5% VAT.

Valuation And Loan Processing Fees

The property valuation fee in Dubai ranges from AED 2500 to AED 3500 plus 5% VAT tax, based on the bank. On the contrary, the loan processing fees are 0-1% of the total loan amount plus 5% VAT.

Title Deed

A title deed is a legal document that serves as a proof of ownership of a particular property. It must be registered with the Dubai Land Department at the time of sale or purchase. Before transferring the title deed, one must obtain permission from any existing mortgage lenders.

Final Thought

Dubai’s real estate sector is considered one of the best investment options. Its ever-evolving property sector offers a luxurious lifestyle. Furthermore, the development of countless skyscrapers, beautiful skyline, man-made island communities and deluxe living ambiance attract investors from around the globe. People can invest in leasehold and freehold properties in Dubai based on their specific interests.

In order to invest in Dubai’s property market, you must define your objectives and investment purpose. Evaluate locational objectives, and features of a specific property and explore mortgage options. The understanding of key considerations allows investors to make informed decisions and capitalize on Dubai’s vibrant real estate market.

Get Our Services

If you want to invest in Dubai’s real estate sector then you should seek guidance to avoid the risk of buying property in Dubai, get feasible real estate and make profitable decisions. Kelt and Ko Realty is a real estate company operating in Dubai. This property group offers real estate services and it also assists in buying land in Dubai for foreigners. It has a team of professionals who believe in offering quality services.

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