An Investment Property Buyer Guide For Dubai
Many investors, internationally and locally feel that in direct contrast to the “highly sophisticated sales process in Dubai which sees developers and estate agents presenting potential clients with superior show homes to view and lovely brochures to peruse, the property buying process in Dubai currently lacks some sophistication and transparency.” – This is not good news when sales agents seek to ‘clinch’ a deal with a potential purchaser.
Read on to see how to avoid the common issues that investors may encounter during the buying process in Dubai.
Altogether there are so many developments which are in the process of being built, that an investor will have to spend a considerable amount of time comparing the qualities of any given development, the developer and the specific properties characteristics and features, all this needs to be compared with the investors available funds, to ensure they get the best valued property for their budget and investment criteria.
When one attempts to arrange a mortgage (in order to buy property in Dubai) an investor can either do this in their country of residence or locally in Dubai. An increasing amount of financial institutions are now offering more products to non-resident purchasers on a monthly basis, therefore it is extremely beneficial as an investors to ’shop around’ for the best interest rates and payment terms.
Should the investor require financial assistance in order to purchase a resale property, he/she will have to have a valuation completed on the property to satisfy the financial institution and further show that the property in question is indeed worth the asking price.
To help smooth matters out, it is advisable to have a solid idea as to what kind of investment you would like to attach yourself to…before you begin searching!
The good news for purchasers looking at buying investment property in Dubai is the fact that there are no property related taxes to speak of. Translated, this means that there is only a minimal additional outlay with buyers having to cover lawyer’s fees he ongoing maintenance of the property as well as any shared areas or facilities.
For all those investors seeking to gain profits from their purchase immediately, there is always the option of purchasing real estate in Dubai that is on resale.
It is important to bear in mind that because there is currently no formal conveyancing system in Dubai, as well as no way of finding out who holds the freehold title of any given property, an investor is encouraged to ensure the property transaction for any resale unit ‘goes back via the original developer.’
This is critical as it is quite common place for investor’s who are not aware and alert to become the victim of fraud. It really cannot be emphasized enough – an investor interested in any resale property must contact the original developer before signing any contract to purchase (note to self – this is one of the most important issues one needs to contend with when purchasing property in Dubai).
As had been done in the past, many property investors turn their properties over to a secondary purchaser during the construction period already, in order to take advantage of any capital gains already accrued.
When it comes to the buying of a resale property during its construction period, most developers will allow for the resale of off plan property; however some developers are of the persuasion that only the original purchaser is allowed the right to resell during construction.
The secondary buyer, in such cases will only be able to resell property upon completion of the development. It has however become the norm for investors to purchase during the construction phase, as the majority of property developments are still to be completed!
Due to the fact that there are no escrow account structures in Dubai, any money an investor pays goes directly into the developers’ accounts (so as to fund the building process).
The fact that in Dubai, the government has a sophisticated process in place, whereby “any developer wishing to sell property units has to agree to place 50% of the price of each unit in a bond and only then is he allowed to sell his property.”
Translated loosely, this means that should a developer go bankrupt or renege on a contract in Dubai, the government should have sufficient funds in the bond to get the project completed.
Such insight into the buying and selling process of Dubai’s property market is imperative and undeniably necessary for all potential investors to be able to equip themselves with all the needed information to speedily come to an investments choice, which will prove lucrative and highly successful.
About the Author
Property Select offers a comprehensive selection of overseas Property in Dubai and the Unite Arab Emirates (UAE), including a news feed, members club and reviews of the latest property developments from around the world.
Further Reading:
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Dubai, UNITED ARAB EMIRATES