There are four possible scenarios for making money on foreign real estate, presented for novice investors, in which even a small capital may be sufficient.
Dubai has a unique situation where monthly mortgage payments are lower than the cost of rent. This means that it is possible to purchase an apartment in Dubai on credit, rent it out, and make a profit.
For example, when purchasing an apartment in the Prive Residences complex in the prestigious Dubai Hills area, the monthly mortgage payment will be $1,700. After purchasing the apartment, it can be rented out to cover the mortgage payments with rental income.
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Applying for a mortgage requires some effort. In the UAE, not every bank provides mortgage loans, but the availability of this instrument is gradually increasing. The mortgage rate is around 5%, which is one of the lowest among countries where real estate investment is common.
Expected income: from $29,000 per year from rent (not including mortgage payments, which are about $20,400).
The cost of real estate in the UAE continues to rise, so investors have the opportunity to make money on properties that are under construction.
This scenario is simple: you purchase a property at the construction stage and sell it when its value increases.
It is important to choose only those properties that have the potential for price growth and avoid overpriced apartments or villas.
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Minimum entry threshold: when purchasing an apartment in installments for $150,000, you must deposit $30,000 at the booking stage and another approximately $60,000 during construction (2-3 years).
Expected income: from 10% per annum in dollars and above, although usually the percentage is higher, but we provide a conservative forecast.
This option requires minimal effort since all the work of managing the property is done by the property operator. There are companies in the UAE market that build investment housing, sell it, and then take it under their management. These are usually large hotel operators that guarantee the investor income for several years.
The essence is this: you purchase an object with guaranteed income and transfer it to management. Your property is rented out, and you receive income regardless of the market situation.
However, the downside is that you have to wait until construction is completed to start generating income.
Minimum entry threshold: from $190,000.
Expected income: 6-8% per annum in dollars.
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Collective investment in the purchase of one apartment or villa. This option is suitable for those who want to start investing in real estate, but are not yet ready to invest large sums.
Purchasing good real estate in Dubai is becoming increasingly difficult, since at the start there is often such a rush that there simply aren’t enough properties for everyone who wants it.
