Even though real estate is dubbed as the biggest investment one can make in life, it is a tricky business that can sometimes get difficult to navigate. Taking into consideration the current Dubai’s property market, you will need to spend sufficient time, energy and effort to find, buy and manage an investment property.
Investing in Dubai’s real estate market can be a great way of making money. At the same time, it is also a great way to lose money if you are not careful. Once you have entered the market, you will quickly realise what works and what doesn’t and find ways to fine-tune your business model.
Rental property is one of the most common investment options in Dubai. Currently, there are numerous residential projects in Dubai. One of the most prominent projects are the Bluewaters Residences Dubai, Emaar Beachfront apartments, Dubai Creek Harbour projects that are expected to be complete soon.
- Prepare for the unexpected
The real estate market is never constant and keeps on changing due to the interaction of various factors. As a real estate investor, you should not expect the rental yields to remain the same at the end of every month. In most cases, the amount will fluctuate from month to month depending on the rates, expenses and more.
- Do not delegate all duties
One big mistake most people do is to delegate all duties to their property manager. Even though you pay your manager to take care of the property for you, don’t expect them to do everything. It is advisable to set aside some time to review the statements and reconcile where necessary. Always make sure all your property statements are accurate.
- It’s not an overnight success
Most people think they can become successful real estate investors overnight. However, the property market is slow moving and it may take time to become successful. Your property must go through more than one growth cycle which can take up to twenty years.
- Do not speculate
All too often, most people speculate the real estate market with an expectation of price appreciation. However, this is not always the case and sometimes the price may depreciate. You should find a property with positive cash flow such as a middle-class rental property. In doing so, you will limit your risks in case of a downturn.
- Don’t forget to run the numbers
Although Dubai is one of the most preferred tourist destinations, not all properties will make a good investment. Therefore, you should do your maths and determine whether expenses will be more than the rental yields.