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Ismail Al Hammadi

08 September 2020

What are the areas with suitable return on investment in Dubai currently?

Is it preferable to include a percentage of the guaranteed investment return in the purchase contract, or not?

Two questions posed to me by an attendee during a real estate culture session that I organized last week from a distance, through the "Zoom" application.

In fact, my first goal in organizing that session was to enlighten the minds of our youth, to inform them about some real estate concepts circulating in the sector, to enhance their awareness, and to remove confusion about some of the concepts that they were circulating in the wrong way, while giving them an opportunity to ask their inquiries, and what they want to know about the real estate sector .

In fact, I received many questions, in which I sought the availability of a lot of real estate awareness among some, and its absence in others, and between availability and lack, I sought every person's thirst to know and discover more secrets about the real estate sector, which prompted me to form a set of goals instead of one goal, to allocate More sessions in the future, I announce that I have thus contributed, even in a small part, to promoting the spread of real estate culture and achieving the required level of awareness that we desire in the market.

From the group of those questions, most of which were purposeful questions, the two questions attracted me in the first line of the topic, and I decided to share them with you today, since they are two common topics in the market. As for the first question related to areas with an appropriate investment return in Dubai, it can be said that most residential areas in Dubai has an appropriate and special return on investment, regardless of the disparity between one region and another, because the geographical location of the region itself, the type of real estate unit and its area, the quality of the service and entertainment facilities surrounding it and the level of demand for it, play a role in determining the rate of return, so we always recommend studying The region and its future are well before the purchase.

As for the second question, relating to the inclusion of the investment return rate guaranteed in the purchase contract, there are two parts to answer it: First, if the rate of return is reasonable and not exaggerated, and in line with the rate of return agreed upon in the market, estimated at between 3 to 8%, this shall be done according to the agreement. Between the developer and the buyer.

Second: If the rate of return is exaggerated and exceeds the reasonable limits, then here is another talk, and unfortunately this phenomenon has spread a lot in the market, during recent periods, from some weak souls who do not trust their abilities to market, so they use a fairy tale rate of return as bait to catch buyers, and how much of a buyer An investor drank from this plot, and became the victim of false promises that have no connection with reality.

In general, and frankly, I say to every real estate researcher: There is no such thing as a guaranteed return on investment, because the market is subject to many fluctuations, especially economic fluctuations, that affect investment returns around the world, not just Dubai, so do not be tempted by the false return rate. Make sure first before the ax falls into the head!

To read the previous articles of the writer please click on its name . 

There is no such thing as a guaranteed return on investment, as the market is subject to many fluctuations.