This is 95% protection against inflation and any global instability. To be more precise, it is a monthly high profit with an unlimited increase in profitability.
Types of objects for rent
It is on the selected type of real estate that your income directly depends on.
- Hotel units. A very popular option in which you are only a financial investor, and the hotel takes care of all the other problems of customer service and accommodation. A nice bonus is the privilege that allows the owner to relax in the hotel for free for 15-30 days. The most important thing, in this case, is to choose the right location. A good profit comes from a hotel room, where the beach, attractions, and various entertainment are located close. Minimum investment ~ from $150,000
- Service apartments. Such real estate is usually occupied by employees of various companies who come into the business. Private guests of such housing are also entrepreneurs who are not ready to spend a lot of time on the selection and arrangement of an apartment. These types of housing are used by fairly well-off people and usually for a period of 6 months to 1 year. Investment ~ from $6000
- Long-term rental of apartments. The most popular and reliable way. This option allows the investor not only to make a good profit every month but also to get a visa and have a full-fledged property in the UAE. Do not forget that 85% of the population of Dubai are foreigners who plan to rent housing and work. The most popular options are studio, one-bedroom apartments, or 2-3-bedroom apartments for families with children. Here it is important to pay attention to the remoteness of the center, the availability of children’s educational institutions, and transport accessibility. This will directly affect the rental price.
- Villas. This type of real estate is also rented for a long time to large families or well-known entrepreneurs. In Dubai, there are both whole complexes consisting of villas and detached houses. Foreigners often want to buy a villa near the coast, such houses are rare in Dubai and they are correspondingly much more expensive. First of all, you need to pay attention to the green area, transport accessibility, and infrastructure.
How to get the maximum benefit from renting out housing
First of all, you need to decide on the type of housing, determine the rental period and choose the right conditions.
- Units and apartments
The owner can choose which type of profitability he claims: guaranteed or non-guaranteed. Most often, the non-guaranteed profitability (profit depends on the number of guests) turns out to be much higher than the guaranteed one. But such options have a risk – lack of demand from tourists. In practice, such cases are reduced to zero. If you are inclined to guaranteed profitability, then carefully read the terms of the contract and be sure to compare the cost of your potential purchase with the prices for similar objects on the market. If the owner offers a very high guaranteed yield, there is a possibility that this yield is already embedded in the value of the object, and during the validity of the contract the owner will pay you your own money, and after the end of the guarantee, the yield will fall.
- Apartments and villas
Several rental options affect the rental price:
– management company. This option is the least profitable for the investor. But there is also an advantage – the owner receives income; all other responsibilities are assumed by the company.
– Local real estate agents. This option is considered profitable and allows you to negotiate the best conditions for the investor. There is a possibility of encountering scammers, so you should only contact a verified and certified real estate agency.
– Independent search for tenants. The taco method is suitable only for very competent and experienced investors who do this regularly and promote themselves in Dubai.
Monthly return on the type of housing:
Units – from 8%
Service apartments – from 6%
Apartments – from 5%
Villas – 7%
It is important to determine for yourself the following parameters: available funds for investment, type of housing, desired profitability, percentage of personal participation in the maintenance of the premises and interaction with tenants, and knowledge of the local real estate market.
