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How to Make Money on Real Estate in Dubai

Posted by Kelt&corealty on December 6, 2023
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Why is investing in Dubai’s Real Estate sector lucrative? The answer is that Dubai has no tax on ownership, sale, and rent. Moreover, the government grants a 3-year visa with unlimited extensions if an investor purchases a property worth AED 750,000 or USD 204,000 on condition that he still owns the property. 

The government has spent a lot on security and infrastructure to make the real estate sector in Dubai attractive for foreign investors, which has benefited the government as more and more foreign investors have been involved in Dubai’s real estate sector. 

Investment Prospects

Dubai is the most popular and attractive city in the UAE out of 7 Emirates, not only for tourists and travellers but also for businesses and investors. The sales figures from 2021 state that around AED 300 billion worth of properties were sold in Dubai alone. Combining all of the other 6 Emirates’ sales figures, it does not make up half of the sales figures of Dubai. 

Residential properties are desirable to investors. They offer high investment returns as the market value is experiencing a good increase in sales and rentals. Investors often watch ongoing projects and buy them at a discounted rate before the project is finished. This results in even greater profit margins and returns. This answers the question of making good money in Dubai through investing in real estate.

Real Estate Market

The Dubai Expo 2020 was a game changer for already-focused Dubai. With an influx of more than usual people attending the event, a sudden rise in demand for hotel rooms and residential properties was seen as a good opportunity for investors to invest in the real estate sector in Dubai.

Some experts point out that holding an event of that magnitude was to attract even more investors by showcasing to them the number of tourists, the security of the city, and endless opportunities in the real estate sector. 

Choosing a Promising Property

Choosing the right property is a very tricky subject. Sometimes, a property may appear very lucrative, but it may be otherwise. Before finalizing any property, research is fundamental.

Recent trends show that homebuyers and investors are interested in comfortable homes and prefer luxurious homes. The recent pandemic increased demand for luxury homes as people stayed and worked more from their homes.

This has also increased the number of people working remotely and spending more time in their houses, increasing demand for more luxurious homes. Buying a luxury property is a desirable option to make more money from rentals or sales.

Long-Term Rentals

Long-term rentals in Dubai can generate a return of around 5-8% per annum. This number is valid for high-end communities like Palm Jumeirah, Dubai Marina, and Business Bay. Apartments in districts such as Discovery Gardens and International City can generate a return of up to 9%.

Different types of residences generate different returns. On average, studios and one-bedroom apartments return some of the highest rates. On the other hand, villas and mansions yield around 4-6.5% per annum.

To rent your property, you need to sign a rental or a leasing agreement to lease your property. The owner does not necessarily have to be present in the UAE for this.

Short-Term Rentals  

Short-term rentals turn out to be more profitable as compared to long-term rentals. They generate one of the highest returns of about 11-13% annually.

There are companies offering services such as property management in Dubai. Their services include finding tenants, dealing with tenants, and managing property. Moreover, they also have designated teams that check, accept, and clean the premises before the tenant checks in and after they leave. However, property management companies prefer to work with long-term rentals.

Best Districts to Invest in Dubai

Dubai’s best districts for investment include:

  • Palm Jumeirah
  • Dubai Marina
  • Downtown Dubai
  • Business Bay
  • Dubai Hills Estate
  • Jumeirah Village Circle
  • Emaar Beachfront
  • Arabian Ranches
  • Dubai International City
  • Damac Hills

Conclusion

Dubai offers a variety of options in the real estate sector. High return rates and property demand offers more investment opportunities. State-of-the-art infrastructure and a safe environment attracts a lot of foreign investors. Opportunities such as short-term and long-term rentals offer another venue to earn money.

Getting unlimited extensions on residential visa on investing in Dubai opens a lot of opportunities which a regular tourist or business visa does not offer. In conclusion, due to various factors, investing and making money via the real estate sector of Dubai seems very lucrative and logical. Now is a perfect time to do it.

FAQs

Is investing in real estate in Dubai worth it?

Yes, the real estate sector in Dubai has seen a rapid increase in investment and offers high returns.

Are there any benefits of investing large sums in Dubai’s real estate sector?

The government offers a 3-year residential visa with unlimited extensions if an investor purchases a property worth AED 750,000 or USD 204,000 or more.

How is the real estate market of Dubai these days?

The real estate market in Dubai is experiencing a boom in investments from local and foreign investors. It’s a perfect time to invest in Dubai’s real estate for future returns.

What is better between Short-Term Rentals and Long-Term Rentals in Dubai?

Both are very profitable options, but short-term rentals yield greater returns of up to 11-13% annually compared to 5-8% in long-term rentals.

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