Is It Better to Buy or Rent an Apartment in Dubai?
As Expo-2020 approaches, interest in UAE real estate continues to grow. Dubai is a global city. Most of its population consists of foreigners. According to local legislation, ex-pats have the right to live in rented houses and buy their real estate. Next, we will consider which cases the purchase of an apartment in Dubai, UAE will be more profitable than renting.
1 Advantages and disadvantages of buying real estate
The real estate market is one of the most stable investment instruments, compared to the stock market and bank deposits, where the situation can change dramatically at any moment. Even during the crisis, the fall in real estate prices does not occur sharply.
- Having your property will give you the following advantages:
Your own rules
In your apartment, you will be able to set your own rules and live by your lifestyle, while living in a rented apartment imposes rules and restrictions on privacy. You will not have pets, often invite relatives and friends to visit, etc.
When you buy a property, it becomes your legal property. You can change its interior and exterior at will. Being the owner, you get complete freedom of action, while the renter cannot afford any significant changes in furniture and decor without prior agreement with the landlord.
Possibility to rent out accommodation
Depending on the circumstances, you can either live in the purchased property yourself or rent it out. According to the UAE legislation, rental payments are not subject to taxation, which will ensure a significant ROI (it can be 4-8% per year).
Real estate is a significant and reliable asset, and its value can fluctuate positively and negatively, but it will never be zero.
- Despite all these advantages, the disadvantages of buying apartments in Dubai also exist:
Dubai has been a thriving resort and the world’s largest metropolis. Despite the decline in prices on the local real estate market, you will have to pay from AED 1,000,000.
Lack of mobility
Having a property in the UAE, you will have to visit the country from to time. If the real estate were bought with a mortgage, you would need to live and work in Dubai until all the debt to the bank is repaid.
Long term sale
Real estate does not belong to highly liquid assets. It may take at least a few months if you want to sell it. If the housing was bought with a mortgage, then the procedure will be even longer, as, in addition to selling real estate, you will have to cancel the transaction with the bank.
Real estate is a long-term investment
Despite its reliability and stability, its payback period can be 5 to 10 years. This is provided that the housing was purchased without the involvement of creditors. So, for example, if you bought a Dubai apartment with a mortgage, then one way or another, you will be tied to the UAE for the next 5-15 years.
2 How to make the right choice
The choice between buying and renting a property in Dubai directly depends on how long you intend to stay in the country. If you spend several years in the UAE and then change the Emirates to another country for permanent residence, renting is the best solution.
In the short term, buying your real estate will not give a high payback. If, on the contrary, you aim to stay in Dubai for a long time or consider the city as a place to invest, then the situation will be diametrically opposite.
3 Our assistance in buying real estate in the UAE
Buying off-plan real estate in the UAE can be considered an investment, regardless of the intended purposes of its further use. Ax Capital will help find the possible purchase area and provide legal assistance during transactions. You can get acquainted with the most suitable offers in the catalog.
Ax Capital will help find the possible purchase area and provide legal assistance during transactions.