With its continuous growth and stable economy, Dubai is one of the best places to buy an investment property.
But while there is no doubt about this, engaging in real estate is a commitment you should take seriously. As such, you must remain careful in every step you take and study every detail to make sure you don’t end up in a stressful situation.
To help you out, here are seven traps you must watch out for and avoid at all costs when investing in Dubai real estate:
1. Failing to Learn About the Real Estate Market Beforehand
Nowadays, browsing listings on real estate platforms and websites is almost as easy as shopping for branded shoes online. You see something that tickles your fancy, add it to your shopping cart, and get the item you bought. The only difference is that there’s more paperwork involved in purchasing an apartment or flat than a pair of shoes.
Still, you must never treat real estate purchases like any regular shopping item. Besides the price and appearance of a property, there are other things you need to consider before closing the deal. These include:
- Local market conditions
- The neighbours and the neighbourhood
- The overall ambience in the property
- The history of the structure itself
While it may not seem like a big deal at first, knowing the market that you’re buying in, the actual worth of the property, and all other crucial information can make or break your real estate purchase. It doesn’t matter if you’re buying to earn rental income or to have a place to live in; adequate research is a must.
Not sure where to start? Real estate websites are good enough to begin your search. However, you mustn’t limit yourself to the information on the actual listings alone.
Instead, look over the average property prices in Dubai, the cost of living in the particular area you’re eyeing, a general overview of the neighbourhood, and other lifestyle factors. Many real estate websites provide all this information and more. You just need to dig a bit deeper.
2. Choosing the Wrong Location
Location is king in real estate as it has the biggest effect on how well your rental property performs in the market, or on the quality of your life once you move into the residential property you bought.
It doesn’t matter if the house or villa has everything you ever dreamed of; if it’s in the wrong place, it’s not worth buying.
Fortunately, many neighbourhoods in Dubai have all the essential amenities most people need. List down your priorities and compare them with the available properties for sale along with your allotted budget.
For most people, properties near their workplace, good schools, and healthcare facilities are the most viable choices.
3. Forgetting to Scout the Neighbourhood
Studies show that first-time homebuyers tend to pay more than the actual worth of a house while experienced buyers get it for a much lower price. There are a lot of takeaways from this, but the one you should be wary of is that some real estate agents tend to take advantage of a newbie’s naiveté.
If it’s your first time to buy, be sure to visit the neighbourhood where the property in question is located. Then, ask about property prices there and determine the average rate per square metre for comparable properties. This information will help you negotiate a better price.
Plus, getting to know even small details about the community can also help you avoid unpleasant surprises when you move in. Below are some of the questions you should be asking before buying a house for sale in Dubai:
- Is the construction work finished?
- Are there any long-term plans for the area? What are they?
- Is the property value in the area rising or declining?
The answers to these questions should give you a headstart in picking out a place, particularly in determining whether you can move in right away or if you’re making a safe investment.
4. Not Knowing the Different Payment Options
With most properties bought through mortgage loans, it pays to know every available option out there to make an informed decision. Instead of going with the first offer you get, why not look around a bit more?
While it’s okay to hear out your real estate agent’s recommendations, you should do your own research first to make sure that you’re getting the best possible deal. This will not only help make the purchase easier, but also save you from a potential financial hazard.
5. Losing Your Deposit
The transfer process of properties done through the Real Estate Regulatory Agency (RERA) – Dubai’s real estate regulatory body – will be carefully monitored from beginning to end. But before you reach that point, you need to stay on your toes.
To make sure that your money is safe, consider using expert conveyance firms to hold the cheque and draft a solid pre-sale contract (also called the Memorandum of Understanding or MOU). This will ensure that the document clearly states when you forfeit your deposit.
To be safe, avoid making out the deposit to the real estate broker.
6. Rushing a Purchase
While buying a house in Dubai is indeed an exciting feat, rushing the process is a huge mistake and can lead to countless problems in the future.
Since you’re going to live there for several years, there’s really no point in fast-tracking the purchase. Instead, consider looking at more properties even if you already found one that you already like. This will prevent you from missing out on houses that may actually be more ideal for you.
Besides aesthetics, you must make sure that a property fits your needs and preferences. It is also important to avoid properties with hidden costs (or concealed issues that can be expensive to repair).
7. Skipping Property Inspection
Want to know how you can dig up issues obscured by a fresh coat of paint or a beautifully landscaped yard? Have the place inspected.
While it may sound troublesome, hiring a professional inspector will allow you to see the actual condition of the house or apartment. This includes faulty fixtures, plumbing and electricity issues, weak walls, leaky roofs, and the like.
Don’t Stress Out on a Property Purchase
Planning ahead and doing some advanced research can help you avoid stressing out on a property purchase. Knowing the most common traps property investors face will allow you to avoid them and get the entire process done right the first time. Get help from a property professional and take advantage of tools such as a mortgage interest calculator to ensure you’re making more confident, wiser investment decisions.