Top 7 features of a great apartment for investment.
How to choose an apartment for investment wisely. What are the criteria for the apartment that will bring high RIO (return on investment), what property will bring you high profit. What to invest in real estate in Dubai. How to choose the apartment floor, apartment unit, amenities, location and so on. What apartment is better to buy and what apartment will rent out in the most profitable way. These are the questions we will discuss in this article in deep details with useful tips and tricks.
Dubai is a popular destination for real estate investment because of these 4 reasons:
- The city offers higher rental yields;
- Property prices are lower compared to many other big and popular cities worldwide;
- When you become a real estate investor you can receive a residency visa;
- There are no taxes when it comes to real estate field.
But choosing the right apartment can be an overwhelming task, especially if you are new to Dubai or even haven't been there. To choose an apartment that is good for investment you will need to consider the following criteria.
1. The location
The first and most important factor to consider is the location of the apartment. One of the key factor for the location is accessibility.
One way to study this is to check the time it takes to reach major places such as beaches, malls, and tourist attractions. You should also check if the area has the access to the public transportation.
The second and as important as the first factor is the level of life in the surrounding area. Explore places and people nearby, see their daily life, what they eat in the restaurants and how they dress. This will help you to understand what tenant or buyer you can attract in the future. If you are not able to visit the place yourself you can just type in the name of the area on YouTube or TikTok and you will see the level of life there.
Another matter to discuss is weather you should buy an apartment for investment by the beach or in downtown, or even maybe in a remote area. This depends on your end decision of what investment result you want to receive. For example, beachfront apartments are the best for short term rent and holiday homes, when the downtown apartments are the best for business and working people, the remote areas properties are great for big families for a long term rental.
Additionally, it's important to consider the future potential of the area and whether it is likely to become outdated soon.
2. The size
The size of the apartment is another important factor to consider. Different sizes can bring different returns on investment.
For instance studios are more likely to bring a higher RIO (return on investment) as it is a more affordable version therefore it will have more chances to rent or to sell. Another way to think of it is because Dubai attracts a lot of people to come to work there and begin their journey to wealth they need a place to stay while they grow and usually these are one person or maximum a couple. In some cases a whole family chooses to live in a smaller place to save money.
While bigger one or two bedroom apartments have another level of clients. Dubai is a city of luxury and a good amount of people are looking for it. Space, light and quality is what attracts those individuals and families.
So each size has it's own client. You just need to decide for yourself what value are you going to provide with your investment.
3. The community
In Dubai there are two types of buildings. The ones that belong to the community and the ones that don't. Community is a number of buildings in the same area built by the same developer. For example JBR - Jumeirah Beach Residences is a community by EMAAR.
Having your building in the community means you will get the surrounding area taken care of and have amenities like pavement, greenery, sculptures, fountains, parks, shops and restaurants.
The buildings that do not belong to a community are not responsible for the area around them. Therefore it might be just sand and stones. It is not the case for all the buildings though, you always have to explore yourself before you make a decision.
4. The quality
The quality of the apartment affects the return on investment and directly influences whether the property will appreciate in value over time.
Be careful not to fall for cheap properties in Dubai, as their value can depreciate very quickly. There is a reason why those properties are cheap. Most likely the are built with poor construction materials that will go bad very quickly.
Regardless if you want to rent or to sell your property in the future it has to be made of a durable materials so that even if apartment fades over time you will just need do make a minor refreshment like painting walls rather then spending a fortune on major fixes like changing the flooring or tiling.
5. The view
The view from the apartment can also be a deciding factor when choosing a property for investment.
First of all you have to check if the apartment is getting enough sunlight. Sometimes due to some architectural specifics the apartment can stay in the shade all day long and it will make it dark and sad. Another thing to check is the size of the windows. Because it is a hot country people used to build houses with a small windows to avoid the house getting hot. It is not a problem nowadays because of modern technologies.
When it comes to the view it mostly depends on the budget. When purchasing an apartment in Dubai the unit with most beautiful view in the building can add as much as a million dirhams to the price of the apartment.
Of course the better the view the better the investment is.
The views like parking or a wall view can drastically depreciate the value of the property.
6. The amenities
The thing is that in Dubai 95% of the buildings have these two amenities by default - pool, gym and the lobby.
The difference is only in the quality of the amenities. Their size and location in the building. For example one building will have a pool on the roof with an amazing view. And another building might also have a rooftop pool but the view will be blocked with the walls. Why constructor did those walls, no one knows but that is what we have.
Regarding the gym the worth case scenario is a small dark room with a very little variety of equipment. By the way even some luxury building have not that big of a gym.
But the lobby, I believe, is the most important factor. Because it is the first thing that anyone sees when enters a building. It will immediately give you an impression about the quality of the property. By the way be careful do not fall for the golden look Dubai people love so much. Golden color does not necessarily means high end quality.
7. The real estate developer
For me this last point is the most important one when you choose an apartment for investment. There are many different developers in Dubai with a few of a really good ones. The company that builds your building is the one responsible for all of those things we discussed in previous paragraphs. Especially it is important to know about the developer when you invest in an off plan project that is not built yet. Even if you don't know much about Dubai or real estate you still can check it on your own. Firstly explore the google reviews for the chosen company. Then see other buildings and projects they have built. Be focused and don't fall for a flashy advertisement and big claims. In fact the more constructor has to advertise themselves the less demand they have.
A tip from our founder
The founder of our company Alaa Mohra says: "When I want to receive the highest premium when reselling the apartment I always choose the unique one, the one that is only one of a kind with the best view in the building, with the most sense making layout that other units don't have. This gives me a big privilege on a real estate market."
The conclusion
In conclusion, when choosing an apartment for investment in Dubai it's important to consider the location, size, community, quality, view and reputation of the developer. By taking the time to explore and carefully consider these factors, you can make a wise investment decision that will bring a high return on investment.
