How To Be an Effective Landlord of Real Estate in Dubai?
May 16, 2023
Considerable demand is observed in the sphere of rental real estate in Dubai. More than 80% of the population is tourists and expats coming from all over the world. Foreigners are looking for comfortable accommodation with no intention to buy property. In such circumstances, investing in luxury off-plan developments in Dubai to subsequent leasing is a sensible idea. But for investments to be as profitable as possible, it is important to properly assess what type of property and in what area it should be purchased.
Due to the fact that there is no income taxation in Dubai, renting property here is considered highly profitable, unparalleled in the world. How to make the lease effective and to get considerable passive income? Let's find out in this article.
Peculiar feature of rental property
Investing in off-plan real estate and reselling in the process of construction or after delivery has become a profitable business for investors to save and increase their capitals. Unstable economy and fragile social situation in the world raises the popularity of the UAE. Political neutrality of the country provides property buyers with the chance to avoid sanctions and other restrictions.
And while the potential profits from rental housing are enticing, being a landlord can be difficult. A rental property comes with significant upfront costs, time commitments, legal obligations, and ethical concerns that can affect your dividends. However, with certain perseverance, responsibility and knowledge, the owners can obtain a source of a stable passive income.
Main principles of managing rental property
Before investing in off-plan real estate in Dubai for future leasing, a buyer should be aware of essential principles of management:
- Correlate your time and money.
Rental property can bring several issues that need time to be solved. If you prefer to stay updated about all the processes of leasing, think about time-management beforehand. Whether you will be able to come to Dubai when it is necessary or you can solve any appearing problem remotely – all these options need consideration.
In case you prefer to delegate the responsibilities and save time, you can hire a professional to manage the rent. In Dubai there are special companies that offer such kinds of services.
- Be ready to face the financial risks.
Most investments involve some degree of risk, but real estate has its own unique obstacles. Upfront and ongoing repairs, a period of rental property downtime, and rent arrears can all undermine your income and affect your ability to pay your mortgage.
Having a cash reserve in reserve or a line of credit can save the day if the property is suddenly vacant for several months or if your tenant is caught in an emergency situation and can't pay the rent.
It is recommended to make savings when the property is still under construction to be able to solve any of the possible issues.
- Put yourself in the position of a tenant.
Rental property is a unique type of investment because you, as a landlord, will have to interact with real people. The more you treat them with respect and understanding, the more likely you are to get a solid return on your investment.
An off-plan property buyer has to step in the shoes of a potential tenant just at the stage of object selection. It is important to pay attention to the location, transportation links, job opportunities in the area, infrastructure and attractions. Have a critical look at the real estate and the neighborhood and evaluate their appeal and comfort.
Help in buying luxury off-plan property
As previously noted, rental property can become a profitable long-term investment. Luxury properties off-plan can bring the same income as the already finished project in terms of leasing. It often happens that the property is ready for use before the payments end. The owner rents it out and continues to pay the remaining balance. As a result, a buyer is already earning, and gives part of income to pay off the debt. These are favorable terms, especially for those who do not own the full amount immediately.
The real estate agency Dubai-Luxury.Property is a useful source of relevant information and qualified help. Contact the specialists to get answers to all questions and start investing off-plan.