Even though a lot of people have benefited from the real estate industry, like any other business, there are many risks associated with it. Regardless of the type of property you buy, investing in the real estate industry requires plenty of money.
Due to the growing competition in the Dubai real estate industry, prices of properties are coming down. This presents an excellent opportunity to invest. Nonetheless, it does not mean that everybody can benefit. Here are some things you need to know before investing in the real estate industry.
- Do research
Before buying a property in Dubai, you need to conduct thorough research. Make sure the property is placed in an ideal location to attract tenants. When doing the research, use analytical approach logically based on the financial facts and market conditions. This is also known as due diligence and helps to purchase the best property.
- Plan for down payment
According to the Dubai real estate regulations, an expatriate buyer is required to make a deposit of 25% while a local 20%. So, you should be prepared adequately with enough money. This is because the down payment in real estate is greater than purchasing commodities. On top of the down payment, there might be other expenses involved.
- Calculate the cost involved
When investing in the real estate industry, it is very important to consider every detail beforehand. First, you need to calculate the amount of money you have and the maximum amount you can borrow. Next, calculate the cost involved in purchasing the property. In doing so, you should also consider operating costs. This will help you to get prepared adequately.
- Types of real estate investments
You need to understand the type of real estate you are getting into. In the Dubai real estate market, there are several types of investments involved such as commercial, residential, industrial, etc. The hotel room investment is a new concept that is gaining popularity in Dubai’s real estate industry.
DAMAC Towers by Paramount Hotels and Resorts is a hotel and residential complex under construction in the Burj area. It is currently sold off-plan which offers a great opportunity to first-time property buyers.
- Relevant laws and regulations
There are certain regulations and laws that need to know before in Dubai’s real estate market. For example, if you are an expatriate, you will need to deposit 25% as down payment while the locals need to deposit 20%. Also, transactions must be conducted only in the financial institutions approved by the Dubai Lands Department (DLD).