Offering exceptional value for money on the rental front, the United Arab Emirates are a good place to start building up a buy-to-let property portfolio. Dubai led the way, and now other United Arab Emirates are following, having recognised the need to build more residential and tourist accommodation and commercial real estate.
As a foreign buyer looking to live in the United Arab Emirates one is a little more restricted, as not all developments offer residence permit or foreign investor visa properties. Properties suitable for foreign buyers are often found in beach developments, such as the Jumeirah Beach Residence for example. The residence permit and visa for property owners grants only temporary residency to qualified investors and their dependents on the basis of property ownership, but there is a difference between the two types of permit. The residence permit for property owners is renewable every two years for real estate bought in Dubai, while the multi-entry residence visa for property owners is renewable every six months and valid for properties in any emirate.
To be eligible for either of these, residence permit or visa, the property one buys must be valued at more than Dh 1,000,000. Mortgages are permitted with the residence permit option, however, if the property is mortgages at least 50 per cent of its original price must be paid off, or Dh 1,000,000 must be paid off if the property's value exceeds Dh 2,000,000. The property must be in a freehold area and entirely owned by the investor, with the title deed issued in the name of the applicant and lease-to-own deeds will not be accepted. The property must also be turn-key, ready to move into and large enough to house all family members expected to live there.
There are quite a few documents needed as well as a medical examination, and there is a cost. The residence permit costs ca. Dh 13,000 in government fees, and if the investor wishes to move dependants into the country, there is an additional Dh 3,000 per dependant to pay. For the visa option, one pays around Dh 2,300 per applicant, and this is the same for each dependant. The amount is due every six months. 1 Dh equals USD 0.272196, so Dh 1 million equates to ca. USD 272,200 and Dh 13,000 to ca. USD 3,500.
Rental yields, for those who wish to invest in UAE but not relocate there, are averaging at just over 7 per cent, an attractive alternative to London, which offers only around 3 to 4 per cent. In the famous Palm Jumeirah in the Dukes and Anantara project developments this can rise to 10 per cent net. Increases in population due to continued job creation means that there is high demand for rental properties. Also offering high yields is the development at Marquise Square, Dubai City, where prices for apartments start at Dh 895,000 (ca. USD 230,000).
With Expo 2020 on the horizon, with will be held in UAE's Dubai, rental yields for tourist accommodation and those exhibiting at the Expo will be higher than ever!
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