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Essential 10 Factors to Consider When Purchasing Property in Dubai

Purchasing Property in Dubai

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Purchasing Property in Dubai

Once you are into purchasing property in Dubai, the important question to ask yourself before you are ready to go to market must be: Financials, Affordability, Ongoing Expenses, Saving, Statistic, Rental yields, Location, Property size /quality, Residence stay – Visa and your Real Estate Agent. So, in this blog, we have included all these points that you have to be careful while purchasing a property in Dubai.

Purchasing Property in Dubai

Affordability: Finding the Right Balance

When it comes to affordability, it’s essential to follow a globally recognized scale. Experts recommend that your monthly housing expenses should not never go beyond 30% of your salary. In order to make this process balanced, the developers have been applying a golden rule to everyone in the name of a perfect payment plan. In addition to paying the down payment, it’s important for you to prepare yourself for other upcoming fees that you are going to go through in the process of purchasing a property in Dubai. Remember that these charges are normally ranging from 5 to 7% of the purchase price, so that it might be easy for you to handle the financials. The exact amount depends on whether you’re buying a ready property or investing in an off-plan property. Be prepared for these additional fees to ensure a smooth home-buying experience in Dubai.

Ongoing Expenses:

This should be an essential point you must consider before purchasing property in Dubai. Beyond the Purchase, the ones that usually 1st time buyers don’t account for. As a property owner, your financial planning doesn’t end with the purchase. For ready properties, ongoing maintenance fees are a consideration. Additionally, annual service fees are part of the ownership responsibilities.

List of Fees you need to consider

Let’s take a closer look at the essential fees that you’ll have to go through when purchasing property in Dubai.

  1. Maintenance Fees – Annual Service Fees charges to the Dubai Land Department based on the RERA Service Charge and Maintenance Index. This index determines a specific charge per sq. ft. and varies by community. You can also find up-to-date fees directly from the DLD’s website.
  2. These fees contribute to the overall cost of ownership, and it’s crucial to factor them into your budget to ensure financial stability.
  3. You can find below some of the needed fees for buying a property in Dubai for a cost overview.
  4. Dubai land Department fees: 4% of the total property price
  5. Title Deed Fee: AED 580
  6. Property registration fee: AED 3000 to 5200
  7. Department Mortgage Registration fee: 0.25% of the loan amount + AED 290
  8. Property Valuation fee: Between AED 2,500 – AED 3,500

Over and above you will also have to pay Real Estate Agent fee: 2% of the purchase price + 5% towards VAT. Annual maintenance service charges depending on rate per Sq. ft. of the developer. And there you have it, a comprehensive guide to understanding the affordability of buying a property in Dubai. Remember, finding the right balance between your dream home and your budget is key.

Savings: How much should I have in hand?

For purchasing property in Dubai for the down payment is your entry ticket, and you need the right amount in hand. UAE Central Bank sets the rules – 20% for expats. Moreover, it’s not allowed to use a personal loan obtained from a local bank to finance your down payment, as it must come from your own savings. However, the above-mentioned upfront transaction costs, agent fees, and bank fees may be financed through a personal loan. This is according to the procedure for purchasing property in Dubai. For all OFF Plan property each developer may have their own payment, interest free plan. This may vary from developer to developer

Investing Wisely: Rental Yields and Location

Considering your home as an investment in Dubai requires careful planning. Assess if the expected rental income covers mortgage and maintenance. Dubai’s real estate potential is promising but demands strategic thinking. Research the market, evaluate location, and balance rental income with costs.

Location Location Location

When purchasing property in Dubai, prioritize your location. Choose a spot near work, schools, and essential services. In Dubai, measuring travel involves time, not just distance. Before buying, grasping the traffic dynamics to ensure a convenient daily commute to reach your regular destinations, attractions, and facilities is important when deciding if this location is suitable for you.

Size, quality, and construction - the pillars of your future home

Consider the size based on your future plans, evaluate construction timelines, and ensure the quality of your investment. Let’s now take an example; A spacious home is a great option, when you are planning to get married, have babies or some of your family members are going to join you here in Dubai. At the same time if you consist of a small family of 2 to 3 members, or you are living on your own, a small unit that aligns with your comfort goes perfect. Which means you are free from paying for something you don’t need to. Factors like a maid’s room, a storage room, or a laundry room, might look small points while selecting a home. But once you start staying long term these factors will eventually turn into important points that need to be considered.

Construction and Quality

When purchasing property in Dubai, you should consider how long the building will be constructed. This is especially if you’re going to buy a secondary property, meaning that you’re not the first owner. Bear in mind to check the works of maintenance and renovation as well as the unit’s overall health status. Involving an outsourced contractor may cost a little bit but will save time and money in future. Besides, if you’re exploring for an off-plan option, ensure to scrutinize the developer’s reputation. Check their track record, reliability in meeting delivery timelines, and assess market appreciation for their past projects. Evaluate the success and demand their properties have experienced in previous

Real Estate Residence Visa

As an expat who is planning to purchase property in Dubai, you should know the laws and conditions regarding the real estate residence visa; they are implemented by UAE’s government. It’s also known as Golden Visa. This type of residency visa grants you a 3-year or 5- to 10-year stay validity, depending on the property’s value. That’s why owning a unit in Dubai is one of the ways to enjoy a long stay in the city.

Finding Your Agent

Investing in real estate is a major life decision. So, selecting the right agent is important, because your home is your constant asset. Here are some key factors to consider, when seeking the right agent while purchasing property in Dubai: 

  • Confirm that the agent holds a valid RERA license.
  • Evaluate the reputation and office setup of the agency, as it directly impacts your overall experience.
  • While most of the time 1st time buyers select their agents on gut feel and while personal connection is important. It is important to make sure the agent can provide statistical breakdowns. and demonstrates a strong understanding of the market.
  • Every great deal in the market is not right for every individual who is ready to invest. Ensure your agent understands your unique requirements and isn’t pushing a one-size-fits-all solution. Check if they provide detailed market statistics for the chosen area, helping you make informed decisions. If you are looking for investments, then does your agent have understanding for the Government future plan in the area.
  • Experience is valuable, but a newly licensed agent who aligns with your needs can be a suitable choice also. Prompt communication and dedication to your investment plan are essential.

Conclusion

And there you have it, the keys for purchasing property in Dubai. Once you have an agent, it’s sure that you are nearing your future rewarding property in Dubai. Always keep in mind that once you are purchasing property in Dubai, make sure that all the points mentioned above have been given a tick in your property purchasing list to reach your desired home to reward you the best.

FAQs

What are the factors to be considered when you buy property in Dubai?
  • Financials
  • Affordability
  • Ongoing Expenses
  • Saving
  • Statistic
  • Rental yields
  • Location
  • Property size /quality
  • Residence stays – Visa
  • your Real Estate Agent
What is the need of a real estate agent in Dubai?

Once you have an experienced real estate agent in Dubai, it would be easy for you to deal with your legal as well as other sides of the real estate world with transparency. As they have been through different facets of the property buying process, it would be helpful for you to have a seamless property purchase in Dubai. Also, they can lead you to the best property on the best package.

Is it worth buying property in Dubai now?

The answer is a yes with a great thumbs up..!
This can be a favorable opportunity for those seeking potentially profitable returns and a luxurious lifestyle in your future. The city’s booming economy, investor-friendly environment, and the availability of freehold areas contribute to its appeal and are making the time suitable for investing or buying property in Dubai.

What is the ROI on buying property in Dubai?

Actually, Dubai real estate investment is having high ROI. Each area provides an elite property selection with a pack of benefits waiting for you in it. As Dubai’s real estate return on investment is amongst the highest in the world in gross rental income, you can get an approximate of 5.19% and return on investment ranges from 8 – 15%.

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