How to invest in Dubai property wisely

We've also listed which areas to invest in 2019 with great annual rental rates & capital gains.

12 Mar 2019, words by Aneesha Rai in The Guides

How to invest wisely

With so many developments and projects releasing every few months and a lot of projects being handed over, it might be a bit difficult to be perceptive about choosing which property in Dubai to invest in. Investing in the right property involves two things: 1. Short-term gains in the form of rental returns (above 5% per annum is considered a good return) & 2. Long-term returns in the form of Capital Gains (where the property price increases as per market conditions). 

Here is a step-by-step approach to investing in a Dubai property wisely:

1. Assess your finances

Assess finances

While most of us look at a home as our first real investment, we must also assess our financial health. Buying a home requires a substantial amount of investment, so it may be wise to save up a little more and rent meanwhile. You know you can afford a property when you have between 30% -50% of the total investment amount in cash, depending on whether the property is ready or off-plan. The rest can be mortgaged, but make sure you are pre-approved before going on the lookout. There are also several investments available with attractive payment plans (some even up to 5 years post-handover), but each of these options should individually be calculated to consider if that's a good plan for you. Rent to own could also be an additional option, but rarely found in the current market. 

2. Understand the nature of investment

Are you looking for a home for end-use or investment? In the case that you want a home for end-use, you will have to look at long-term capital gains. A contrary approach is used for investment, the approach of "not putting all your eggs in one basket" applies as well as being on the lookout for smaller ticket properties in prime areas that offer the most rental income. 

End-user options

Beautiful private upgraded Villa in The Meadows

Villa in The Meadows

AED 5,500,000

Upgraded Contemporary Grand Foyer Garden Home

Villa in Palm Jumeirah

AED 10,900,000

Exquisite residence, Top Deal in Emirates Hills

Villa in Emirates Hills

AED 22,500,000

Investor options

3 Bed Apartment | Community Living | Central Park

Apartment in City Walk

AED 3,398,000

Extraordinary Quality 1 Bed Apartment | Jumeirah Village

Apartment in Jumeirah Village Circle

AED 1,020,000

360k below OP End Townhouse in Jumeirah Luxury Living

Semi-detached townhouse in Jumeirah Golf Estates

AED 3,600,000

3. 2019 outlook

A helpful price timeline as per Property Monitor
Data & Analysis by Property Monitor

Make sure you're up to date on the latest developments on the Dubai real estate market. Here's our 2018 report and our 2019 rental yield report. Luxhabitat releases these reports every quarter, so please check back in. It's important to assess the area you are buying in, whether it's a mature community or a new one. Remember, real estate is a marathon. 

4. Why you should consider getting a real estate advisor

While this info can seem quite overwhelming, even for a seasoned investor, sometimes it's best if you consider getting a professional real estate agent. The right agent will assess your budget, add light to the goals you would like in terms of price gains as well as give you realistic expectations on the same. They will also have a deeper understanding of market sentiments as well as access to analytics that will help you reach the right decision.