How To Get Started Investing In Rental Properties In Dubai


How To Get Started Investing In Rental Properties In Dubai

29/06/2024, 13:42:26

There are many ways to earn money. Getting a job is the most common, but investing is something that can really benefit you. Hence, it is a good way to make a fortune and improve quality of your life. Besides, investment in rental properties is one of the simplest and popular investments. So, why not to start investing in rental properties?

First of all, before you starting investing, you need to take three steps:

  • Set your mind and your goals
  • Do your due diligence to understand a market
  • Set your budget.

First, you need to understand all advantages and possible pitfalls of rental property investment clearly. As for your goals, they should be specific and really achievable. Then, you need to understand all available payment options and set your budget. In other words, you need to make decision whether you will buy for your own money or using a financing scheme. At last, the market study involves researching the type of property you are going to invest in. To, clarify, you need to find out what properties enable you to get the highest rental yield rate.

In this post we will cover some of the questions related to your first steps on the rental investing path. We hope it helps you with your preliminary study and make decision.

Why are rentals the best investment?

Investment forms vary. For example, you can invest in stocks or in rentals. However, rentals tend to be a preferable option for investors who are not risky natures. So, what tokens make a rental the best investment?

  • Low risks. Rental market is always in demand. In other words, people may come and go, but they always need a dwelling place to stay and live. Just look at the numbers. The population in Dubai is steadily increasing as Dubai becomes more and more attractive city to live, work, and run business. For example, in 2010 there were 1.9 million residents in Dubai. However, now their number is about 3.2 million. Moreover, statistics say Dubai to be a city of huge rental opportunities with about 70 percent of its residents renting their homes.
  • Constant cash flow. The rent practice in Dubai is 3 – 5-year tenancy contract on average. Hence, once you find your tenants, you can enjoy the rental you get from them for 3 – 5 years.
  • Stable cash flow. While a stock market is highly fluctuated, a rental market is stable. Therefore, you may be sure your income is stable but won't fall down rapidly and fiercely as it can occur with a stock market.
  • Little skills to apply. We don't speak about the possibility to be a successful landlord with knowledge at zero level. Of course, you should do your due diligence to study real estate and rental market. Only this way you can make your best investment with the best ROI. However, you don't need to explore a lot of tactics and analyze huge massive of figures information as you need to do with stock investment.
  • Passive income. Renting out your flat, villa, or office generates a passive income. That is to say, you have to make little effort to get your money with your rentals. Of course, you have to solve some issues if you decide to manage your property yourself. However, you may forget about this duty as long as you opt to hire a specialized company for the best property management. This way rental is definitely a passive income!
  • Appreciation. Do not forget, that investing in rentals you are still investing in real estate. And real estate tends to rise in its price in the long run. Therefore, with rentals investment you benefit twice – when you rent your property out and when you decide to sell it. Though, now you can hear the real estate prices has gone down.

What type of property is the best rental?

There is no ready answer for this question. The method of your research and its result will vary depending on your goals and your budget.

For example, if your goal is the highest rental yield rate, you need to compare unit estimated yearly rent with its price. However, keep in mind the flat, villa with too high rental charges are a risky asset as it may stay vacant for a long time.

However, if your goal is the lowest vacancy rate commercial property may be a more attractive asset. To clarify, companies tend to rent their facilities for longer period. Hence, with good rental asset you can have higher occupancy rate and enjoy constant cash flow.

To be more specific, we would like to present you a brief picture of rental market trends. Investments in residential property in Dubai are the post popular now. Its RIO may reach up to 12.4% as it comes with community of Arjan. The next outlet on the rise during last few years is hotel property investment. In most cases it guarantees you high occupancy rate and stable cash flow. At least, commercial rental property ranks third and promises to be even more attractive in the near future.

To conclude, when all these questions and steps are done, you will get the real pictures of your possibilities and opportunities. Then, you can step on the road of making money:

  • Find a unit that meet your criteria, requirements, and budget
  • Purchase the unit
  • Find a good tenant
  • Get your returns in the form of rent.

No matter what rental you invest in, the property needs good maintenance. By signing a management agreement with BSO, you will trust your property in good hands.














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