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Business in the UAE: investing in real estate in Dubai

Buying property in Dubai has long been synonymous with stability, profitability, and liquidity. If you want to invest in real estate in a developed and still promising region, take a look at off plan properties in dubai for sale. Investments in facilities under construction will reduce the cost of “entry ticket” to this market, and start developing business in a country with a stable economy, transparent laws, and strict regulations.

Let’s look at some of the nuances of a business focused on investing in real estate in Dubai.

Investing in real estate in Dubai: business benefits

– Possibility of obtaining a Resident Visa when buying property in Dubai

The purchase of a residential property valued at AED 750,000 (USD 205,000) or more qualifies for a resident visa. In addition to the total amount of investments, several more requirements must be met:

  • the property must be located in a freehold area;
  • the size of the property must correspond to the number of family members applying for a resident visa;
  • A residence visa requires you to spend at least 180 days a year in the UAE. Otherwise, it can be canceled.

real estate in Dubai

– High yields when renting out the property or reselling an object

If you buy a property at the stage of 20% completion of the complex, then upon completion of construction and when the house is put into operation, housing can rise in price by 20-30%.

Renting out property on a short or long-term basis is another type of semi-passive income. The risks of downtime are minimal, as the regular influx of expats and tourists guarantees almost year-round occupancy.

– Favorable tax environment 

One of the most obvious advantages of investing in real estate in Dubai is the absence of taxes on the purchase or sale of housing. The buyer only needs to pay a state duty of 4% of the value (although current developers sometimes take this payment on themselves). In addition, the owners are exempted from paying the annual property tax.

– Wide range of assets to invest in

In Dubai, you can buy studios, apartments with different numbers of bedrooms, penthouses on the top floors of residential complexes, townhouses, spacious houses, land for self-construction, or luxury villas. And this is only in the segment of residential real estate. You can also invest in commercial market objects: offices, hotel rooms, premises for shops, restaurants, etc. Investors with different budgets will be able to find an object for their investments (however, it is worth remembering that commercial objects don’t give the right to obtain a resident visa).

– Choice of purchase and payment options

Dubai is not only keeping up with the times but sometimes even ahead of it. Thus, Dubai has allowed and legalized cryptocurrency payments for buying and selling real estate, making it one of the first places in the world to do so. In addition, foreign buyers have access to such tools as mortgages or installments from the developer. 

If a buyer cannot personally come to the country to purchase real estate, the entire transaction, from a virtual tour of the property to the signing of documents, can be carried out remotely.

Investment in real estate in Dubai: disadvantages and difficulties of the business

– Risks of unfinished construction

Risks of global fraud in Dubai are virtually eliminated, as the law on the protection of rights is transparent, strict, and observed by all parties. But still, there are force majeure situations when developers are unable to fulfill their obligations and complete the construction of the facility. In this case, the Dubai Land Department appoints another developer who completes the complex and puts it into operation. Otherwise, the government will return to the buyer all funds paid for the purchase of off-plan property in Dubai.

– Risks of increasing the terms of delivery of the object

This option also applies when you buy a dwelling under construction. To minimize such risks, you should initially give preference to projects of reliable and reputable companies. 

– Changing price trends

Despite all the stability of the real estate market, this business area remains not the most predictable. Housing prices can go up or down. It all depends on the economic situation in the country and the world.

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 Business expenses and taxes when investing in real estate in Dubai

As already mentioned, the tax burden on homeowners in Dubai is fixed at zero. This is especially important for investors who own several units at once. If you buy real estate in Dubai from the developer, you can additionally save a little on agency fees. 

Zero taxes combined with low risks, high returns, and a favorable business environment make Dubai the best place to start your own business.

Buying investment property in Dubai: the stages of choosing an object

– Determine the purpose of the purchase. Do you want to rent the property out to tourists on a short-term basis, or to expats on a long-term basis, or do you plan to resell it as its value increases.

– Decide on the neighborhood of your future purchase. Explore neighborhood infrastructure. This determines the level of liquidity and profitability.

– Learn the history of the builder. How long this company has been operating in the Dubai property market, how many objects have been built, and how many of them have been commissioned on time. How satisfied with the quality of housing are those who have long owned an object from this developer.

– Compare the prices of similar properties in the same neighborhood. Monitor rental prices, and try to make a forecast of profitability.

Choosing an investment property in Dubai

You can compare prices in different neighborhoods and for different types of properties on the official website of a real estate agency in Dubai Ax Capital. If you fill out the feedback form, the company’s specialists will be able to contact you and find the best object that suits your requirements.

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