Four fears that prevent investors from buying a property in Dubai

Dealing with investors' sudden fears 一 is another task of a good broker. If a person invests in an overseas market for the first time, he usually has many restrictions in his mind. Let's deal with how to help an investor overcome the anxiety and decide to buy property in Dubai.

Fear 1: The project will not be profitable

Many investors doubt the possibility of getting a good return on their investment in property in Dubai because of the instability of the market or lack of understanding of its peculiarities. In fact, the property market in the UAE is reliable and safe. According to statistics, the total sales volume in June was 52.3 percent higher than in the same month last year. The number of transactions amounted to approximately 14,370: most of them were the purchase of apartments.

Of course, it cannot be said that there are absolutely no unprofitable deals in the Emirates. Brokers make mistakes here too. How to avoid this? Do not promise the investor that after signing the contract the value of the aparеment will increase the very next day. If the client has doubts and cannot overcome his fear, offer him analytics with confirmation of your forecast. Nowadays, the property market is significantly digitised, so it is not difficult to obtain such data.

Fear 2: Accompanying unforeseen costs

Investors often fear that buying property in Dubai may result in unexpected costs associated with property maintenance, taxes and utility bills. This fear is easy to dispel: the key 一 is to be able to clearly communicate to the client how much money will be required on top of the basic expenses.

Important to know! There is no rental income tax in Dubai and there is no property ownership fee.

What else you need to pay for:

• A one-time fee to the Land Department. In Dubai it is 4% of the value of the property, in Abu Dhabi and Ras Al Khaimah it is 2% and in Sharjah it is 5%.
• An administration fee to be paid to the developer. On average, it ranges from 1100 AED to 4774 AED.
• The owner is also required to pay money for the maintenance of the aparеment (service charges). Usually the amount is specified in the contract and varies from 12 to 18 AED per square foot per year.
• The cost of utilities is calculated on a monthly basis.

Fear 3: unfinished construction

Dubai has a well-developed off-plan property market (purchase of property at the construction stage). Investors find it profitable to invest their capital in the ‘primary’, as at this stage not only the best prices, but also available profitable interest-free instalments.

Every second investor is afraid of becoming a defrauded shareholder in Dubai. However, few people know that the Emirates has very strict laws for developers. And clients, in turn, are protected from all sides.

1. Before starting the construction of an object, the developer is obliged to provide a guarantee to the bank. It proves that he has money for the project and that it will not run out suddenly.
2. The client's money does not end up in the hands of the developer, but in his escrow account. They can only go directly to the developer at the final stage of construction.
3. The Dubai Land Department (DLD) controls all processes. The house will be delivered in any case, because if the developer can not continue the project, the licence will simply pass to another company.

Fear 4: property costs

Many people believe that property in Dubai can only be bought at an overpriced value. However, this is not true. The cost of an aparеment in Dubai depends on many factors, such as the neighbourhood, type of property, availability of additional amenities, etc. Of course, in the Emirates there are both elite complexes with a high cost per square metre, and more affordable housing.

For example, a studio apartment in Dubai can be purchased from 510 000 AED. The trick of the Emirates is that for this money your client can buy not only housing, but also access to the internal infrastructure of the complex. For example, investing in a studio in the high-rise Red Square Towers, you will get access to a swimming pool, tennis and basketball courts, a modern fitness centre, etc.

Conclusion

In general, investors' fears may be justified, but it is your job as a broker 一 to analyse all the risks and help your client make a balanced decision before purchasing property in Dubai.