A sizeable number of investors are eying Dubai for property investments. However, whether your property is a holiday home or serves purely as an investment, managing it can be challenging if you are thousands of miles away. These useful Dubai property management tips for overseas investors can help those interested in owning real estate in the city.
There are several reasons why more people are looking to buy property in Dubai, with flexible payment plans and attractive pricing ensuring investors and potential homeowners stay interested. The UAE was also ranked as one of the safest countries in the world in 2019, which is added incentive for investors thinking of purchasing property in the city. Additionally, while VAT has been introduced it does not apply to an investor’s rental income. With this in mind, here are some property management tips for overseas investors:
Finding the right property
Consider the location
The first rule in ensuring that an overseas property has greater yields is to buy it at the right location. The location determines the amenities that are offered near the property and is, therefore, an important consideration for investors before they decide to invest in the emirate.
For example, some of the best locations in Dubai are near offices, tourist spots and business hubs. Profitable locations that come to mind in this regard are areas like Dubai Marina featuring freehold properties in the UAE, which non-nationals can purchase. In fact, MyBayut’s recent Dubai property market report for 2019 mentions that areas like Dubai Marina have remained popular with investors.
Identifying the right agent
There are several ways to ensure that you are getting a good real estate deal, which will have sizeable returns. One of the most effective is networking and talking to the right real estate agents in Dubai. Knowing the right people can help you find the right property at the right price. For example, it may help you find a property in an area that has a history of promising tenants — a fact that you may be unaware of as an overseas investor. So take the time to research your agent’s history and refer to friends for recommendations.
Choosing property management companies
Managing several or even a single property, like an apartment complex, for example, is a challenge and even more so for overseas investors who can’t manage them in person. Most international buyers, therefore, resort to reputable property management services to handle legalities and other requirements for them.
Of course, choosing the right service is just as important as relying on one at all. On that note, here is what investors must keep in mind when choosing a property management service to oversee their investments in Dubai.
Overcoming investment legalities
There are several complicated real estate legalities that investors have to grapple with when investing in properties in Dubai. For example, consider EJARI, a process that can be overwhelming for expats or overseas investors who aren’t familiar with it. A term that literally translates to “my rent” in Arabic, EJARI is a government-run programme that regulates all tenancy contracts in Dubai.
According to the UAE law, all tenancy contracts in Dubai need to be registered online via the EJARI portal. The service is mandated to ensure that all private rental contracts in the emirate are structured in a government-approved format and are legally binding. So, a professional overseas property company that has direct access to EJARI registration facilities can be a boon for foreign investors. A look at our guide for registering EJARI can give investors a better idea of what to expect.
Look for a company that guarantees tenants
Foreign investors looking to purchase properties in Dubai for rental income are hardly in a position to look for tenants in the city. Reputable international property management companies in UAE have access to hundreds of brokers and potential customers that can serve as tenants — a welcome respite for buyers outside the UAE.
Maintenance support is a benefit
Our Dubai property management tips for overseas investors also cover the maintenance aspect of things. In addition to processing important legalities and tenancy issues on behalf of their clients, a property management service that also maintains your assets would be helpful. Such services also reduce maintenance costs for clients thanks to discounts they receive by partnering with local maintenance companies.
Learn about their tenant screening and rent collection process
An overseas property management company may claim to ensure “premium” tenants who are regular with rental payments, but it still pays to ask the service about it personally. If you plan on investing in a rental property, your returns will depend on your rental income. To ensure profits, ask shortlisted companies how they handle vacancies.
Similarly, in the case of overseas rental property, there may be instances of a rent dispute. In this case, a company that also deals with payment issues, like bounced rental cheques, and has a strong legal background in rental litigation can keep your asset secured.
Regular performance updates and financial records
Financial reporting makes collaborations between overseas investors and property management companies more transparent. Therefore, it is wise to select a service that has a proven track record of keeping foreign clients in the know.
For instance, make sure that shortlisted services provide timely statements showing the expense and income of your property on a monthly basis. This also includes financial records of any items replaced and maintenance performed. To keep it safe, review methods these services use for processing payments from tenants and how they will forward the money to you. It is also a good idea to be aware of current currency exchange rates.
Our interview with an expert on property management companies in Dubai will give investors a better idea of what to expect.
That’s a wrap of our Dubai property management tips for overseas investors. Are you interested in purchasing a property in the emirate? Check out an expert’s advice on buying property in Dubai in 2019. For more reasons to invest in the country, take a look at why the UAE is a safe place to invest in real estate.
For more posts regarding property investments in Dubai, stay tuned to MyBayut.