Dubai real estate market is one of the most attractive real estate markets in the world. Buying a property in Dubai can help you get lucrative returns on your investment. The question is, how should you go about it?
If you are a new investor, most likely, you will want to take the traditional route of searching online for apartments, townhouses, and villas for sale in Dubai, contacting the seller, and taking it from there.
But, there are also some more convenient methods available to invest in Dubai real estate market. By choosing one of these methods, you can invest your money in some of the best properties in Dubai.
If you are thinking about where to get overviews of these methods, this post is for you. Just continue reading till the end, and you will get a good understanding of them.
Investing In REIT Stocks
REIT is the abbreviation of Real Estate Investment Trust. REITs are the organizations that finance, operate, or own income-generating real estate properties. Perhaps the best thing about REITs is that anybody, including new investors, can invest in their mutual funds to generate profits from valuable real estate.
As a REIT stockholder, you will receive a percentage of the income without buying or managing the property. The stocks are generally traded on leading stock exchanges and offer steady and high dividend income. Throughout the trading session, you can buy and sell them exactly similar to stocks.
It is important to note that REIT stocks are considered very liquid investments and are generally traded at significant volumes. Three main types of REITs are there in the market. These include Mortgage REITs, Equity REITs, and Hybrid REITs.
If you want to invest in REIT stocks, it is best to consult an experienced real estate broker or a professional real estate investment advisor who will recommend you the best ones to buy after analyzing your financial objectives.
Buying and Renting Out a Property
Another tried-and-true method to make profits from Dubai real estate market is to purchase and rent out a property. If want to take this route, it is a must to ensure that your expenses related to the maintenance of the property will be lower than the monthly rental you can charge.
All you need to do is to use a reputable, online real estate portal such as fäm Properties to shortlist some apartments or villas for sale in Dubai, buy one from them, and rent the property out. You can also work with a traditional real estate broker but that may make the process of finding the right property a complex and lengthy one.
Choosing Property Flipping
If you have the right resources, property flipping can help you make some good profits within a short period of time. First, you need to find an underpriced property that requires some renovations. It is vital to make sure that the renovations will not need you to pay a significant amount of money.
Once you are done with the renovations, you need to resell the property. One difficulty with this method is that it is quite difficult to predict the actual cost of the repair work. However, working with an experienced real estate contractor should help you figure it out.
It is important to mention here that if you take out a mortgage to purchase the property, you must try to complete the repair work as quickly as possible. This is simply because the longer you have the property, the more you need to spend on mortgage payments.
Utilizing Online Real Estate Investing Platforms
The key objective of online real estate investing platforms is to connect real estate investors with real estate developers. These investors typically prefer to finance projects through equity or debt. You need to pay a certain fee to your chosen platform and wait to receive periodic distributions.
One important thing about these types of platforms is they are liquid and speculative. As a result, they cannot be used by anyone. Sometimes, it requires a lot of money to utilize these platforms because many of them can only be accessed by accredited investors.
Accredited investors are companies or high-net-worth persons with experience dealing with private, risky investments. If you want to join the group of accredited investors, you need to have a net worth of more than $1 million (as an individual or jointly with a spouse). This excludes the value of your primary residence.
Alternatively, you need to have earned over $200,000 in each of the earlier two years. Together with a spouse, this amount needs to be more than $300,000. There is no specific document that can prove your eligibility as an accredited investor. This means you will need to release your financial statements which demonstrate that your present net worth is over $1 million or that you had earned the aforementioned money in the last two years.
As you can see, there are different methods to invest in Dubai real estate market and each of them can help you make some good profits. Just be sure to choose the right method as per your situations, requirements, and preferences.