Dubai is a prime real estate market for investors, with a wide range of properties for sale, including houses and luxury properties. Many people have been wanting to invest in Dubai since the government amended the legislation to allow foreigners to buy residences and apartments.
Buying a property in Dubai for foreigners has many advantages, including a large potential for Return on Investment (ROI). There are hundreds of properties available for future investment in Dubai. Like Villas, condominiums, apartment buildings, and family homes. If you want to invest in a property in Dubai, you need to spend some time researching many things.
Factors to Consider When Buying a Property in Dubai
The days of tight limitations regarding foreign property ownership in Arab countries are long gone. Investing in Dubai (ranked among the world’s fastest-growing economies), is one of the best investments you’ll ever make.
However, if you want to buy a home in Dubai and obtain residence, you’ll have to deal with a number of procedures and restrictions. For first-time real estate investors & buyers, this can be rather overwhelming.
Here are some things to consider for locals or expats looking to buy a property in Dubai:
Determining Your Motive
One of the most important factors to consider when you are planning to buy property in Dubai is to decide whether the property will be used for investment or personal use.
A property purchased for personal use differs significantly from one that is rented out, which, in turn, differs significantly from a retirement or a second home. If you’re looking to buy a property in Dubai as an investment, make sure you know what the market price is and what rental yield you can expect.
Understand the Buying Process
Property can be bought ‘off-plan’ from a developer or ‘resale’ from a private seller in Dubai. When buying off-plan, expats must submit their passports as well as a reservation form outlining the deal’s terms and restrictions.
If the property is still under construction, make sure the agreement specifies a completion date and it should have an escrow account.
Furthermore, If you are buying a resale property from a private seller, a Memorandum of Understanding (MOU) describes the terms and circumstances of the transaction, following which the buyer often pays a 10% deposit to guarantee his purchase. The transfer of deeds can begin once financing is secured.
Know the Importance of Credit Score
A credit score is a numerical representation of your creditworthiness based on your payment history. It is derived using timely debt payments, advance payments, and other comparable payment histories and is based on a value between 300 and 900.
Bad payment habits can drastically reduce a person’s credit score. It is critical to have a strong credit score when considering buying a property in Dubai. It not only improves one’s chances but also aids in the acquisition of a substantial mortgage.
Choose Your Location Wisely
Location is one of the most important factors to consider when buying a property in Dubai. Individuals interested in purchasing an apartment or a luxury home in Dubai should research the finest areas for future real estate investment.
Some of the city’s most desirable sites, such as Dubai Marina, Downtown Dubai or Business Bay are connected with a specific set of amenities that allow residents to live a high-quality lifestyle.
As a result, investors should consider purchasing property in Dubai that will benefit them. Finding such properties can be time-consuming. However, Zoom Property provides you with a list of the greatest real estate in Dubai in perfect locations that also provide a long-term return on investment.
Knowing About the Law
In recent years, some new regulations have been put in place, including mortgage limitations, buying off-plan properties, transferring and the transaction fees. It’s necessary for everyone to keep up with the newest rules in order to make well-informed decisions while buying a property in Dubai.
Surveying the Property
If you’re planning to buy an existing property from a private seller, it’s a good idea to engage a certified, professional surveying firm. Why? Because the owner is responsible for the upkeep of a property.
Surveyors can assess the property in question by conducting a thorough inspection and alerting potential buyers to the possibility of future high-maintenance costs, particularly for properties such as villas that may be vacant for several months.
After you take possession of the property, it is your obligation to maintain it, therefore as a buyer, you want to make sure you don’t inherit any big issues.
Affordability and Budgeting
Affordability is one of the most significant variables to consider when purchasing real estate property around the world. The housing costs cannot exceed 25% of an individual’s total income on a monthly basis. Moreover, you should also have enough budget aside for upfront costs.
As the owner of a real estate property in Dubai, you must keep track of maintenance bills and make annual service charges payments.
Additional Costs and Fees
Keep in mind that there may be additional fees and costs associated in addition to the purchase price of a property. There will be developer costs or fees to pay to your real estate agent in addition to legal fees.
Fees for land registration and maintenance may also be required. Expats can expect to pay roughly 2% in land registration fees if they buy an off-plan property.
For instance, maintenance costs, which pay for the upkeep of gardens and other common facilities, are either fixed or variable depending on the size of the property.
This might build up to a significant sum, so it’s crucial to consider the actual cost of buying property in Dubai into any financial strategy for the prospective purchase.
Property transactions in Dubai are typically supported by legal agreements like an MoU (Memorandum of Understanding) or SPA (Sale and Purchase Agreement) between the buyer and the seller.
These agreements spell out all of the terms and conditions, as well as the buyer’s and seller’s roles in completing the property transfer.
Make sure you understand your obligations as a buyer as outlined in the contract. And always ensure that you understand and agree to all of the terms and conditions before signing.
Dubai is a safe area to invest and buy a property. Even due to the ongoing coronavirus epidemic, which is being managed confidently and quickly through vaccination, the real estate sector is booming. This makes it an ideal place to buy property. And by keeping the aforementioned factors in consideration, the entire process will become a hassle-free one for you.