How To Make Smart Investment in the Dubai Real Estate Market

Dubai Real Estate : Do you want to invest in the Dubai real estate market  but aren’t sure it’s the right move? It can be hard to settle on the type of real estate investment that suits you. Read on for more about making smart investments in Dubai property.

5 Ways to Make Smart Investment in Dubai Real Estate Market

UAE has grown tremendously over the last five decades, and foreign investors have invested their money, especially in Dubai real estate. And with the country’s liberal business environment and tax-free zones, it’s no wonder that the region offers a dynamic financial sphere for potential investors. Also, there are so many investment opportunities in Dubai, especially for people looking to make the most of their money. But investment can be a complex subject, whether in Dubai property, forex, or stocks, making it even harder for people to choose smart investments. So, how do you make the right choice?

The one area most people are interested in investing their money in is real estate. Despite Covid-19 affecting the residential real estate market due to lockdowns, which forced citizens to stay at home, the market has bounced back, and property prices are expected to keep rising in 2022 and beyond. This is due to supportive economic reforms and improved vaccination programs that have helped quicken a rebound from the pandemic-induced slowdown last year. So, investing in Dubai property is a sure-fire way to make some revenue. But how do you tell if you’re making the smart move? Here are five ways to make wise investments in Dubai real estate. 

Purchase a Dubai Property

Purchasing Dubai property is generally viewed as a smart investment when done properly. There are two ways to do it. First is homeownership in Dubai. Non-residents can purchase properties in designated areas across the region known as free investment zones. Many off-plan properties are offering competitive payment plans. Alternatively, you can buy an already built property, depending on your preference. The idea is that you purchase the property for self-use, but it appreciates over the years.

And even though the real estate market goes through up and down cycles, it’s historically proven that people who hold their Dubai properties for the long term get higher capital gains. Second, you can rent out your bought property or rent a leased property, for example, and turn it into an Airbnb. This will generate passive income (link here) for your business. There’s a high demand for property leasing in the region because approximately 95% of people living there are non-natives who come for work and need to rent homes. Also, residential properties generate between 5-12% annual returns. 

Crowdfunding

If you want to invest in Dubai real estate but don’t want the hustle of managing the property, lack the time, or don’t have enough funds to go all in, then crowdfunding should work for you. Here, a company pools resources from a group of investors to purchase a property of your preference. Then, the company rents out the property and shares the rental income with investors, depending on your capital investment. Also, the company can sell the property and share the profits on a similar basis. With crowdfunding companies in Dubai, such as MAISOUR, you can own a property with as little as AED 500. Read on for more on crowdfunding (link here). 

Real Estate Investment Trust (REIT)

REITs are identical to mutual funds. Here, the fund purchases many properties and manages them. Such properties may include hotels, apartments, healthcare facilities, schools, or other commercial properties with high chances of generating profits. Examples of REIT funds in the country listed on the NASDAQ stock market exchange include Emirates NBD REITs, Emirates REIT, which are both Sharia-compliant. But you’d have to open a brokerage account in the Dubai financial market to access all stocks and REITs in the region’s stock market. 

Property Flipping

Another real estate investment idea in Dubai is flipping houses. You can buy a property and resell it to someone else fast (no longer than 12 months) at a profit. You can resell undervalued properties, still under construction, especially in developing areas or repair units and sell them at a higher value. However, this can be capital–intensive. 

Real Estate Limited Partnerships (RELPs)

This type of cooperation involves a general partner (a developer or property management company) and limited partners (external investors). The partnership involves buying projects under construction or building properties, then selling the units and distributing the profits. The purchase is made possible with the investors’ money, and once the property is sold, you get your yield, which is on a per-share basis. The partnership is liquidated after the last payout. 

Key Highlights

While investing in Dubai property has always been thought of as capital intensive, it doesn’t have to be that way. Suppose you lack the financial muscle to go all in and purchase properties. In that case, you can make smart investment decisions, including crowdfunding, Real Estate Investment Trusts (REITs), or Real Estate Limited Partnerships (RELPs). If you’re willing to go all in and have the financial muscle, your options are homeownership, renting out owned or leased properties, or flipping properties.

Considering investing in Dubai’s property market through crowdfunding? MAISOUR is a platform where investors can grow their wealth via crowdfunding. check out our latest investments from MAISOUR Crowdfunding Platform in UAE.