Rental investment, also known as buy to let investment, can be a great way to earn a reliable source of income on your investment. Your capital expenditure in a property stays relatively intact over time, provided you find a reasonably priced property in a stable area of the city and country you plan to invest. This means that, as with most real estate, your investment will appreciate over time and should you eventually want to sell the rental investment you will likely get more for it than you originally paid.
Getting more money for your property when selling it is an excellent method of protection against the costs of inflation. For instance, if you purchase a property worth $500,000 and sell it ten years later for $700,000 you will have made a profit – regardless of inflation hikes in the economy. One of the key issues with entering into a rental investment is making sure your property will be something people or businesses want to lease – that it is in a steady area where housing is in demand or a favorite tourism spot where a quality rental can fetch a top dollar return.
One such place is Dubai. Located inside the United Arab Emirates (UAE), it is a popular destination for short and long-term workers as well as vacationers. One of the many things that make Dubai an attractive place to own buy to let investments is because it is a tax-free city. No income or capital gains tax is collected here. Other factors include Dubai’s easy accessibility from most major airports worldwide, the low crime rate, a pleasant year-round climate, and first class facilities to enjoy including luxury shopping, a man-made Island just off the shore which water parks and marine animal parks, and some of the most modern architecture in the world.
Some of the more specific points which make Dubai Real Estate a good property investment area:
Freehold ownership
This means you will own the property as well as the land on which it stands. As a foreigner, you can have an absolute interest in the property. Also, see Dubai Law No 7 of 2006. A free zone, by comparison, is a specific area in the city in which standard laws or restrictions on business and restrictions on 100 percent foreign companies do not apply. Keep the difference in mind when looking at investment properties or see Dubai Law Number 4 of 2001.
High Expat Populations
There are many expats from around the world, who come to Dubai on work contracts for a set number of months or years. Most of the expats choose to rent an apartment or house during their stay. The contract are generaly one year renewable contract paid in advance in one or few cheques. Why not have them rent your property?
Pro-Landlord Market
In a pro-landlord market, the law protects landlords from some of the issues which can befall property investment owners. For instance, non-payment of rental fees, household damages, and more. In the Dubai market, it is common to require a one-year payment of the rent upfront. This gives an excellent, secure income for a property owner in Dubai.
Secure Investment
In Dubai, a good investment property can produce a 6-9% rate of return, after deductions for regular maintenance. The property market for Dubai Real Estate has been making a comeback since 2012, and although it saw a rise or ‘peak’ in 2014’s first quarter, prices began to fall in 2015. But the dynamism of the Dubai’s economy and the strongly anticipated World Expo 2020 offers an excellent opportunity. Dubai is as well in the top 5 of the world most visited cities. This makes 2019 an excellent time to invest because you will be buying for the best price possible in a market which encourages this. Dubai, in particular, has benefited from a number of its government’s strategically planned regulations. This means that the property market in the city will continue to mature and become increasingly stable.
