10 facts to keep in mind while buying your property
By buying a property on a mortgage, your monthly rent could go for your mortgage repayment
For those living in the UAE, taking the plunge into property investment comes with many concerns that require careful consideration. Below are 10 points that could help put your mind at ease when considering investing in property in the UAE:
The luxury property segment will always be synonymous with the UAE. However, as the population grows, the demand for affordable housing is set to continue for years to come. As a result, developers are now moving towards bringing more options of affordable housing for first-time buyers and young families looking for a solid investment. Smaller sized townhouses and generous apartments are becoming ever more popular.
While the UAE property market is still relatively young compared to other cities in the world, this offers investors a better investment proposition. Investors looking to purchase properties can potentially get higher-than-average rental yields in comparison to similar developed markets. However, carry out your own due diligence when making assessments on the market as interest rates on the mortgage can fluctuate considerably.
Planning to spend the summer out of the UAE? Why not consider letting your property as a holiday home for short-term rental? Remember, your guests are likely to choose a holiday home based on design, feel and functionality, so invest in the look and feel to keep your short-term rental price competitive.
Put your rent money into a mortgage
As a UAE resident, you are likely to spend a substantial sum of money on rent. By buying a property on a mortgage, your monthly rent could go for your mortgage repayment. You may also choose to lease out the property and the rental income could go towards your mortgage payments.
Location is king
Where you buy a property can make the biggest difference when it comes to seeing your investment grow. Across the UAE, new projects are under development and investors now have the luxury of choosing from a number of communities with good levels of infrastructure, facilities and lifestyle amenities at arm's reach.
Diversify your investment portfolio
Planning for the future, whether it means saving for university fees for your children or supplementing your income for retirement, should be a key priority for everyone. If you are planning to diversify your investments, consider including real estate in your portfolio.
Start saving now for the down payment
In today's market, UAE nationals purchasing property are required to put a down payment of 20 per cent and while non-UAE citizens must set aside a 25 per cent down payment. Start saving, so that you can afford the down payment.
Consider going off-plan
If you have ever considered buying a property in the UAE, you would have come up against the question of whether to buy off-plan or to invest in a ready property. While there are pros and cons for each option, you should know that buying off-plan is not as intimidating as it may first appear. Many developers are now offering more flexible payment plans for off-plan properties.
Settling down in your own home
If you are renting, the majority hesitate to make any changes to their home. Buying your own home can give you a sense of security. Being settled allows you to make renovations and modifications to make your living environment as comfortable as possible.
Stricter regulation for agents
The UAE government has taken active measures to ensure that real estate companies and brokers are licensed to provide their services. These regulations work towards protecting the investors and regulating the market. For your peace of mind, check the agent's credentials before entering into any agreement and making any payments.
The writer is head - consumer assets at ADCB. Views expressed are his own and do not reflect the newspaper's policy.
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