I just finished a conversation with a client who was looking to purchase a studio in Dubai for a rental property. Boy, what a thrilling experience it was. In the realm of real estate properties, studios tend to be the most compact of but that does not suggest that buying an apartment in a studio is a stroll through the woods. Finding the perfect property, whether studio apartments or villa for sale in Dubai requires many tasks. If you’ve not done your homework correctly you could be enticed by a deal that sounds fantastic, but is totally different in the real world. Let’s look at the steps I follow personally for each of my clients. You may also be able to purchase studios or any other kind or apartment within Dubai. Purpose of Purchase If you’re buying an apartment or a house in Dubai or a house the one thing you should first define is the motive behind your investment. Apartments are among the most profitable investment options in Dubai since they are less in size, have a lower price and are much easier to rent and are easier to sell. The main reasons my clients to purchase apartments for residential use in Dubai are as follows: Rental Income As a real estate investment is a must to look for deals that will allow you to earn a decent return for your money, don’t you think? Apartments for rent can yield amazing yields. Because the cost of purchasing an apartment is less than an apartment or townhouse it is possible to begin earning rent with a minimal amount of investment. Certain areas of Dubai that have apartments that yield decent rental yields are Dubai International City, Discovery Gardens, Jumeirah Village Circle and Dubai Sports City. They are well-developed with well-maintained communities. Therefore, finding the right suitable tenant to rent your Dubai apartment won’t be difficult. For example, I bought an individual client a small studio located in International city for 250,000 AED, which we rented at a cost of AED 25,000/year, earning the tenant a 10% return. Another client of mine, I purchased a studio within Jumeirah Village Circle (JVC) for AED 460,000 that was previously rented at AED 46,000 (10 percent yield). Capital Gain Another motive (actually among the most important reason) that people decide to invest into real estate are the chance for capital gain. We all know that price of properties always increases. The real estate market goes through two phases (upward cycle and down). There is no way to guarantee (no formula that can predict) the value of your home will increase or decrease in the coming years However, there are actions you can take to boost the odds of your investment’s appreciation. One way to make sure that your newly purchased apartment in Dubai will rise by value, is to put yourself in the downwards cycle. Be aware of the market and observe which direction the prices are going. Most people prefer to purchase and feel more at ease buying when price is rising however the actual profits are realized when prices fall. What do you need to do? Simply wait and watch the market, and when you feel that the prices have fallen significantly purchase the property. So, your house in Dubai will certainly increase in value once the next upward trend begins. Another way to make sure that your Dubai property’s value will increase is to purchase a property in an undeveloped or upcoming neighborhood or structure. It doesn’t mean you should just purchase whatever you can get the chance to get. Knowing your research and the trends in prices is vitally important. The only way you’ll be able to profits from your home in a community that is not being developed is to buy it for a price that is lower when compared to the prime or developed locations in Dubai. Personal Use Perhaps you are someone who has saved enough cash to buy an apartment Dubai to ensure that you do not need to worry about paying rent for a long time. The method we consider the properties is a bit different than the previous two scenarios. The first thing I offer to my customers who wish to purchase an apartment Dubai for their own use is to sit down with them and engage in discussions and attempt to create an image in their mind of what they would like to buy. From an investment perspective If you are looking to invest, you could choose an apartment that has an area of 350 square feet as in the event that it will yield excellent returns. But when you are looking to purchase the same house to use for personal purposes it might not be suitable for you. In contrast the studio that is greater dimension e.g., 600 sq ft may not be within your budget, but this space you have is perfect for your needs. You could get the loan to buy a house if do not have the funds to purchase a home or you don’t wish to spend all your money in the first few days. Another distinction between purchasing the apartment you want in Dubai to use for personal reasons and investing in it is that there are feelings in the process. This is the home you’ll call home; therefore, you should feel the connection with the place before you purchase it. Finding the Property Deciding on the best reason to purchase a home is the initial step in the process and is also the most crucial step. It’s like the building blocks of a house, if you do it done wrong, and the whole structure is going to fall down. The next step you must complete is to identify the ideal property. You can engage an agent to help you find the right suitable property. If you’re not currently working with a broker in Dubai or aren’t satisfied with the services you’ve received call me and let me handle all the legwork for you. A few of the most common methods to locate a studio available for sale in Dubai are as follows; Hire a real estate consultant Finding a reputable real estate agent to purchase an apartment Dubai is always useful. There are many advantages to choose a person who is a licensed real estate broker in Dubai. For instance, a reputable consultant is knowledgeable about various buildings and communities. There are some things that you might not be aware of, but having a good broker in your corner will make sure that nothing is kept from your view. Many people email me with questions about a project that is not on the plan they’d like to invest in. There are many instances where I simply tell them not to pursue an idea, they’re interested in. If you’re an outsider you might not be aware of the sales representatives and the developer of these companies are frequently accused of misleading the public. I have personally known many who have invested in a specific investment only to patiently await the realization of the plan. It is possible to avoid all this when you work with a professional and knowledgeable real estate professional on your side. Property Listing Websites To become acquainted with the market and to find out what kinds of properties and prices are offered in various communities, it is possible to look through several property listings websites, including Property Finder, Bayut, Dubizzle and Just Property. You can apply various filters according to your preferences. A listing of homes will be shown to you. Remember to consult with your real estate agent for the properties for sale in Dubai found on these sites. Comparing Properties To make an informed decision it is essential to compare as many properties that match your requirements as much as possible. Don’t be too focused on the first property you see. Different areas and buildings in Dubai have different costs and the prices are usually based on the following elements. Signing the MOU After all the essential aspects of looking for an apartment for rent in Dubai and evaluating various possibilities and the condition of the property are taken care of and you are ready to put in your bid. At first, it may be a verbal proposal that is sent to the seller by your agent. However, it is preferential to submit your proposal in writing (email or Text message). If that the offer is accepted, or both the seller and buyer have come to a common agreement, it’s time to record the agreement in formal writing. Your agent will draft a Memorandum of Understanding (MOU). The contract contains all the specifics of the contract and needs to be signed by buyers and sellers. MOU should contain the following details: Buyer & Seller Details The MOU must clearly state the essential information of the buyer and seller, e.g., Names and Passport Numbers, Nationalities, and so on. Property Details It is crucial that all information related to the property listed in the MOU e.g., apartment/Villa number, building/community Name, Land Number, etc. Agreed Price As a price for the property in Dubai has been reached between the seller and buyer the price should be included within the Memorandum of Understanding. Seller must obtain a NOC from the developer, and they typically charge extra for this type of document. In many instances sellers require buyers to pay for the NOC fee which is okay so long as it’s mutually agreed upon. You must adjust the NOC fee to the final purchase price, if you are the buyer are paying for it on behalf of the seller. Transfer Date Another important thing to mention on the MOU document is the precise date for transfer. In many instances the parties are not in the country. A mutual date needs to be determined and included in the MOU. 10 10% security deposit This is vital. Buyers and sellers both have to sign an amount of 10% in a security check and then hand it over to their agents. According to the land department and the land department, agents have the power to keep the security checks. If one party decides to leave the contract following the signing of the MOU and the other party is given the option of putting down the security check. This assures that both parties have signed off for the sale after having given an honest contemplation. Other conditions If there are other conditions that were discussed and agreed upon between sellers and buyers, they should be mentioned in the MOU too. The final section of the agreement is devoted to these kinds of terms and conditions. Financials Involved You’re investing money to purchase an apartment or house in Dubai and, for this reason it is crucial to be aware of all the financial aspects that are involved. Here are a few essential financial expenses to be aware of when buying a house in Dubai. The Purchase Cost (To be payable in the form of Manager’s cheque) 4.4 Percent fee for registration with DLD (to be paid by Manager’s cheque) An additional 5% tax is added when you purchase commercial building in Dubai. Trustee Fee (AED 2,00 if the value of the purchase lower than 500 000), (AED 4,000 if purchase value is more than AED 500 000) + 5 percent VAT Title Deed Fee of AED 580. 2.2 per cent commission on brokerage Transfer of Ownership When everything is done and the transfer date is set by sellers and buyers, they must meet in a trustee’s office (if you’d prefer to meet at your preferred location, I’ll arrange it for you as well). Seller and buyer and the respective agent will gather at the office of the trustee. The trustee will scrutinize all documents and confirm information. If everything is found to be acceptable the trustee office will make a request to transfer the title over the Dubai Land Department. It typically takes about an hour to have everything completed in the office of the trustee and obtain the title deed for the property you just purchased in Dubai. Utility Registrations One of the most common errors that new investors make is that once they’ve gotten the title deed, their task is over. If you’re planning to travel to Dubai in the hopes of buying a property, you should give you a few more days to register your utility. The first thing you’ll need to do is go to DEWA (Dubai Electric and Water Authority) office and sign up in the role of the new proprietor. It is also necessary look for a separate business that offers district cooling services. If so ensure that you identify yourself as the owner on their database too. Getting It Ready Once you’ve successfully completed the purchase process of an apartment Dubai and have all utility bills registered, it’s time to prepare it for your prospective tenant. If the house is rental, you don’t need to perform any work apart from transfer the lease agreement from an owner who has passed it on to you. However, if your apartment is not occupied and you want to find a new tenant, you could list the property for lease with an agent for leasing. We have an in-house team of property and leasing experts. managers. The team will take charge of everything from finding the perfect tenant for your home to managing the property. The most important thing is not to hear complaints about minor issues from your tenant, while you’re on vacation and are unable to do anything to fix the problem.