How to Invest in Dubai Real Estate: 5 Ways to Get Started

With so many new projects in the UAE and all the attractive advantages that developers in Dubai are offering, one cannot help but be tempted to buy a property. Do you know that investing in real estate is now more accessible even if you don’t have significant capital?

Being the fourth-best country in the world to invest in, the UAE has generated large profits in the real estate sector in the recent years. Thanks to the exceptional opportunities and growth potential this land has to offer, Dubai real estate in particular is booming. According to data released by Reuters last September, investors can expect an average growth of 3% in property prices during 2023. In other words, the ultimate beneficiary is the investor. So, here are the five ways to start investing smartly in real estate.

1- Buy a Single-family Home

Among the multitude of houses for sale in Dubai, investing in single-family homes is the easiest way for beginners with little experience in real estate. There is definitely a remarkably high rental demand for single-family homes since they offer affordability and ease of property. Considered as low-risk investments, this type of investment property makes it possible for mortgage lenders to offer mortgage at lower interest rates, making single-family homes a reliable income property.

2- Purchase an Off-plan Property

Dubai’s off-plan properties are more than ever attracting lots of investors, primarily due to their reasonable prices. Indeed, priced significantly less than ready properties, off-plan properties offer investors the prospect of the property increasing in value near to completion and handover. This probability is reinforced by all the signs of healthy growth that the real estate sector in Dubai is currently witnessing. Flexible payment plans with small down payments of only 10%, are one more reason to buy under-construction properties. Some smart developers in Dubai even propose instalments for two to five years after property handover, which gives you the chance to rent out your house before starting to settle payments!

3- Go for REIT Investment

‘Real Estate Investment Trust’ aka REIT, is stock in companies that invest in real estate by acquiring and managing multiple properties such as apartments, hotels and commercial properties etc. Investing in REIT means you can benefit from Dubai’s real estate market without buying a property, and get monthly dividends free of worries. Whether you choose to invest in Equity REITs or Mortgage REITs, this new type of property investment guarantees a stable source of income as REITs tend to remain steady and produce a higher yield than other equities. On the bonus side, REITs are easily converted into cash as they are traded on the major stock exchanges.

4- Invest in a Property Calculator

This is the tool that every future real estate investor should buy before purchasing any property. Not only does it save you time and money, but it helps you be more informed about the potential of properties you would like to invest in. Indeed, the investment property calculator enables you to estimate the potential profitability of an income property by using input data – including the property listing price, mortgage payments, cash flow, Cash on Cash Return, expenses, etc. – based on predictive analytics.

Tips before investing in real estate:

Location:  you should choose locations with high demand, near essential amenities such as transport, schools, health care, etc.

Best Time to Buy: Make sure to invest in any property when mortgage interest rates are low.

Price Negotiation: Keep an eye on market conditions to be able to negotiate the price to the max.

Learn the 1% Rule: If a house rents for at least 1% of the purchase cost, it might be a good investment.

Opt for small apartments: Resale of smaller units is faster and offers a good ROI.

As a tax-free activity accompanied by many interesting advantages, especially for non-residents, investing in a property in Dubai can be highly profitable.