IF YOU THINK ABOUT INVESTING IN REAL ESTATE OF THE MOST BEAUTIFUL EMIRATE, YOU WILL BE USEFUL TO LEARN ABOUT THE BASIC TYPES OF SIMILAR INVESTMENTS AND THE BENEFITS OF EACH OF THEM. Dubai really offers one of the highest levels of real estate income - in terms of both the capital cost of the property and the rental rate. It is she who attracts investors to Dubai in the first place. Only here you can get up to 20% of rental income per year. In addition - the security of investments, even in real estate under construction, off-plan, protected at the state legislative level.
To create the most transparent and effective system for monitoring and recording transactions in the real estate market is one of the priorities of the main body for regulating the real estate market in Dubai, the Dubai Land Department and the Dubai Real Estate Market Regulatory Agency (RERA), its unit.
Our choice is always and everywhere predetermined by our own goals and objectives, but also by our character, risk appetite, or, conversely, caution. How many people, so many opinions, but the set of both of these can always be reduced to a fairly narrow range of specifications. Similarly, the situation is in the field of real estate investment. There are four types of major Dubai real estate investments, depending on the purpose.
1. Investment Portfolio "Speculative"
Key Features:
The highest liquidity among all options for real estate investments in Dubai;
protection against inflation due to the growth of the capital cost of the object;
investments in facilities under construction with the possibility of capitalization of up to 30% and higher per year; investments from US $ 100 thousand.
Risks:
lost profits from the use of capital between the withdrawal of funds from one project before investing in another attractive investment project;
the likelihood that construction time may be extended (although at the moment, the Dubai leadership is closely monitoring all deferred or even frozen projects and returns funds to investors if necessary).
The Speculative portfolio is a highly liquid investment in Dubai's residential / commercial real estate under construction at the initial stage of construction (at the pit stage), as well as ready-made secondary market projects, the so-called "hot offers".
The choice of an investment portfolio is determined by three major factors: time, price and risk. For the objects under construction, the same three main factors play a role: willingness to wait for the completion of construction, a certain risk associated with the fact that you are investing in something intangible (although recently Dubai developers reduce this risk almost to nothing), as well as the fact that the commissioning period may be delayed, as well as the price of the issue. And one more nuance: in the case of a “hot offer” you need to make instant decisions and make a quick deposit, which can also become a stressful factor.
The investment level for this type of investment starts with US $ 100 thousand: the larger the investment amount, the higher the dividends. This type of investment has the highest liquidity (taking into account the risk and timing), and the net income will be the difference between the originally invested funds and the market value of the object at the time of its resale (up to 15% per year).
Why are people ready to wait? We ask the investors themselves. Igor Glazov from the city of Astana, Kazakhstan, invested in Dubai, because, in his opinion, real estate has a certain anti-inflationary stability: "Over time, everything becomes more expensive due to demand - both bread, gasoline, cement, metal and other materials used during construction, and this quality, anti-inflationary stability protects the investor better than others and protects the investment portfolio, unlike money on deposit accounts, which just because of inflation lose their purchasing power, and interest does not even catching up with real inflation. "
Further, if you are a supporter of more conservative decisions or are not at all inclined to wait for the completion of construction, and in general somehow do not trust what you can’t touch, then the time factor becomes secondary. Now your choice is determined more likely by your individual goals. Suppose renting is exactly what suits you.
2. Investment Portfolio "Rent" 
Key Features:
average rental income of 7-8% per annum; the possibility of investing from US $ 130 thousand;
capitalization of the facility over time up to 15% per annum;
less risky in comparison with the Speculative investment portfolio;
the ability to use real estate for your own needs and projects;
the opportunity to choose among residential apartments, commercial real estate.
Risks:
solving issues with tenants; accounting for the timeliness of both payment of rent and maintenance costs of real estate; all risks associated with self-rental;
a periodic decrease in the capital cost of the object itself, which, however, on an annualized basis results in exclusively growth.
If you are buying property in Dubai for the main purpose of renting, then the “Rent” package is suitable for you, a stable investment in Dubai’s luxurious apartments, which brings year-round income in foreign currency. Ready-made housing for furnishing or luxurious furnished apartments, with all the amenities of a modern residential complex, or office, retail premises - this is what the Rentport investment portfolio offers.
“Why did I invest in Dubai?” Asks investor Sergei Dolmatov from Moscow: “Firstly, from all transactions with real estate in Dubai (business use, sales, renting) there is income stability (in comparison, for example, with securities if, of course, you can’t speculate with them.) For example, in 2011 I bought two two-room apartments (one bedroom each, as they say here) in the JBR area. Then they cost 1 million dirhams each. These are apartments somewhere 68-70 squares each. In 2014, these apartments were already worth 1.5 million dirh on the market mov, that is, their price increased by almost 50% in three years. Plus, from the completion of all three years I had an income of 7% per year. Today, the market value of apartments has fallen somewhat, somewhere by 10% per year, but these are Now the market conditions. I’m sure that by the end of the year my apartments will again add 10-15% in price, so I’m calm. "
But back to the investment. Sea, sun, sleepy bliss, year-round beaches! Dubai is truly a tourist (and not only) paradise, which we will talk about later. And if you don’t want to think about any domestic problems in this paradise, if you become a “landlord”, choose the “Warranty” package.
3. Investment package "Guarantee"
Key features: the acquisition of hotel real estate property at a price of US $ 250 thousand;
guaranteed rental income in the region from 5-10% per year, depending on the project;
a formal contract with the developer for the provision of all hotel services;
the opportunity to use your property under a hotel room for yourself for 1 week in a year;
the absence of problems associated with independent rental of premises and control of occupancy.
Risks:
- upon the expiration of the guaranteed income period (from 3 to 7 years depending on the developer), various risks associated with fluctuations in the tourist market and demand for the property (practically negated due to the high demand for hotel rooms, insufficient offers and inclusion of your property in the rental pool )
The very name of this investment portfolio suggests that it was created for people who are careful and quick-witted, but aimed at a guaranteed result.
If you need only net income, choose this investment portfolio, which consists mainly of hotel apartments, with all the ensuing benefits and advantages. Buying hotel real estate is the easiest way to invest, sometimes not even requiring your presence on the sale. In the future, the hotel chain or tour operator will take on all the problems, including controlling the level of occupancy, which these companies have specialized in for years. So this type of investment can be called passive and guaranteed. It will bring you up to 10% per year.
What do the investors themselves say?
“It seems to me that the main purpose of investing in real estate, if it is not work, is not so much earning as protection against hyperinflation. And in Dubai it also brings excellent operating profit,” said investor George Loria from Ufa. I purchased a room in a Dubai hotel for 1.35 million dirhams. By agreement with the developer, I will receive 10% per annum guaranteed, regardless of how he will rent the room there. In addition, I myself can rest there for a week in year with family. " What did we say? Right, passive income!
Of course, there will always be those who are not satisfied with any of the types of proposed options for the traditional classification of real estate investments.
Dubai is ready to offer the Million Plus investment portfolio to more than wealthy investors.
4. Investment Portfolio "Million Plus"
Key Features:
investments from US $ 1 million in hotel real estate under construction or in the finished hotel real estate;
Acquisition of a 3-4 star hotel property;
execution of a contract with the developer for the further lease of the entire complex with a guaranteed income of 8% per annum; capitalization of the facility at the level of 10-15% per year.
Risks:
the need for constant analysis of the market situation (these risks can also be minimized by contacting professionals);
the need for some personal control, since a project of this level already implies a high personal responsibility.
The Million Plus investment portfolio, as its name implies, includes whole "apartment buildings", as previous rentiers and landlords would have said, worth from US $ 1 million. Or complexes of commercial buildings, offices, entire hotels, building land. This is a completely different level of investment, as they say, the highest level. For example, three and four-star hotels are currently offered for sale in the Dubai market in areas such as TECOM, International City, Deira, Al Barsha and Al Sufouh. This, as a rule, is a finished or under construction property at the completion stage with an average of 100 or more rooms for each building. We are talking about investments of 110, 155, 275 million dirhams (US $ 30 million; US $ 42 million; US $ 75 million), but the liquidity of such investment objects is one of the highest. Will the tourism business be profitable? Suffice it to recall that the emirate is determined to attract 20 million tourists a year to Dubai at Expo 2020. Perhaps this is all said.
Let’s listen to what the highest level investors, millionaire investors say. An Indian investor, Diraj Saluja, who has been living in a villa on The Palm Jumeirah for several years, believes that there is no better place than Dubai for living and investment. He says: “You need to understand that real estate investment of this level, from US $ 1 million or more, is not just a passive investment. It is a business project that can be developed in order to get even greater profit from it in the future.” My plan is to purchase a hotel in the free economic zone of TECOM.The developer gives a guarantee of 8% per annum on rental for 5 years.
And then the market will show how the situation will develop. In any case, it is clear that the capitalization of such projects also remains at a fairly high level. "
Undoubtedly, this investment portfolio, like others, also has certain risks. But these are risks that are characteristic of the entire situation on the market as a whole, risks inherent in any large business enterprise, guaranteeing a high income if successful.
If we figured out the types of investments, it remains only to summarize in conclusion why you need all this. Besides the financial side of investments, which, we hope, has become obviously profitable for you, there is also an economic factor and a pure prestige factor. Dubai is a fashionable place, hardly anyone will argue with this. This is a modern, striking imagination huge “project”, a project of the future for the whole world, an example of how you can even build a futuristic, functional and sought-after resort city, a world shopping center, an economic oasis and just a modern metropolis in one embodiment even in the middle of the desert. With only 5% of the UAE's oil reserves, the emirate managed to become the first among its neighbors and to turn the capital earned on oil to growth, to create their own future at the expense of them.
What else are we all looking for in a dream city?
The security that has been cultivated in Dubai, the wonderful climate most of the year, the stability of the local currency - the dirham, pegged to the US dollar (which is extremely important recently), convenient transport infrastructure (remembered Moscow traffic jams?), Created from scratch and immediately from taking into account all the needs of a growing city, low prices for an ordinary consumer basket (here they are quite low due to the abundance of cheap labor). Whatever you are looking for - peace in a villa by the sea, good luck in business at the intersection of many trade routes of Asia, Europe and Africa, or just a good option for reliable and passive placement of your capital, and maybe all this together - the answer will always be Dubai
You can obtain additional information on the acquisition and management of real estate in Dubai from IMEX Real Estate specialists by phone in Moscow +7 495 510 0008, toll-free phone in the UAE 800-IMEX (800-4639) or by sending a request by e-mail [email protected].
