If you have bought a property in Dubai, then you will no longer need to pay rent to anyone, also you can get away from the 37% average rental hike this year. Anyway, you should take a further step and making yourself to become a Dubai landlord.
When you turn to be a landlord you are going into Dubai property investment business, not only a house owner. This going to be a big change for you, and demands a business-like approach, else you better keep your saving in the bank or going for a good holiday trip instead.
Being in Dubai property investment business is not for everyone, but buying rental properties in Dubai still increase everyday from a business view, provided that you are a long term investor for property and not short term property speculator.
For instant, you buy a two-bedroom apartment in The Dubai Promenade area to let out, this going to cost you around Dhs650,000 and the gross rental would be about Dhs60,000, you need to less Dhs10,000 in service charge. So the net yield is 7.7%, it is enough to cover the mortgage if you bought the apartment by loan.
The advantage is that rents go higher year in and year out, so do capital values. If this year’s 30% rental increase was maintained, then in 2009 you would have Dhs82,000 in rent, and about 12% return on the buying price.
But there is also disadvantage. Rents could fall back depend on the world economy and supply of property in Dubai is keep increasing, this might send property tumbling if economy down.
Now purchasing property is a long-term investment, so what you have to be very careful about is that your financial status must be in good shape, in order not to wipe out entirely during the economy crisis.
Property moves in cycles, there are ups and downs year in and year out. So you can’t avoid some bad cycle periods during the time you own a property, but you do have to be ensures that you can survive throughout the bad cycle, thus you do not have to sell up at the worst time in order for you to live to enjoy the equally inevitable upside.
If you can find a good property in the strategic location, which offers a yield higher than the mortgage charge, then for sure over the long run you are stand at the winning side. Moreover, as rentals rise over time, you can pay you debt ahead by using the surplus income you gain from the rental, this will expedite your mortgage completion.
However, in more developed property markets this has become transparence, you can’t get much profit as yields have fallen to very low levels.
This is still feasible in Dubai, though it might in the future which is another reason to buy now and not wait until house prices are increasing and rental yields much lower.














