Investing in rental properties in Dubai is a smart move for many. But if you’re just starting out as a beginner, you might feel overwhelmed. 

Hence, this article will walk you through how to invest in rental properties as a beginner. This is typically marked by due diligence and several considerations before swooping in and buying a property.

Let’s cover all of these below. 

Understand the Dubai Rental Market

Before you dive into investing in rental properties, it is important that you assess why you want to invest in the first place.

For many, they are after Dubai’s high demands and strong rental yields. The gross rental yield for properties in Dubai has averaged at 5.45% with a steady 4.9% year-on-year price increase per square foot. 

There are several factors that drive this resilient market:

• Millions of tourists and expats flock to the city yearly, resulting in a constant demand for rental properties Dubai.
• The continuous economic growth that introduces a business-friendly environment will also attract demands for rental properties from international employees.
• Dubai’s top-grade infrastructure and lifestyle offerings create a fulfilling place for living and investing.
• The city has a resilient real estate market that has endured through the 2008 economic crisis. Now, it has blossomed into a vibrant pool of investor-friendly opportunities. 

Choose the Right Property 

Once the goal is set to invest in rental properties Dubai, the next step is to choose what type of properties you want. 

Residential Properties or Commercial Properties

Residential Rental Property

Residential rental properties in Dubai are more ideal for beginners as it is easier to navigate. It generally has a lower starting costs and easier mortgage options. 

Additionally, the tenants would usually be individuals, families, and professionals, which you can easily have a great connection with. Plus, demand for residential rental properties in Dubai are on the rise ensuring a solid stream of potential tenants.

Commercial Rental Property

Commercial rental properties in Dubai are more complex and expensive. However, these properties do come with longer lease terms and higher returns. 

Moreover, landlords will primarily cater to businesses for offices, retail spaces, or industrial purposes. Managing these properties does require more knowledge and expertise for the commercial market. 

Off-plan or Ready-to-Move

Off-plan

Choosing whether you want off-plan or ready-to-move in properties can mainly depend on your financial preferences. For off-plan projects, these are usually marketed at a lower price point. Plus, if you want less financial strain, off-plan properties offer an installment plan that you can accomplish within years. 

However, you will have to wait until its full completion before you can start earning rental income. This is the biggest downside for off-plan rental properties Dubai. 

Ready Properties

Ready properties are, by their name, ready for occupancy. If you have the budget to pay for the property upfront or if you’re willing to take a mortgage, this is for you. Moreover, the price difference between ready and off-plan properties can range up to 20% to 30%. 

But, you’re also paying for the convenience and the opportunity to profit from this Dubai rental property immediately. 

Assess Property Rental Value 

After choosing the desired property, the next step is to assess the potential value of your property. Factors that can affect the value of your rental properties Dubai are:

• Location  
• Condition of the property 
• Amenities and Lifestyle

Know the Legal Considerations

The next step you need to take into account is the legal considerations that come with any type of property that you have invested in. 

Property Ownership

For foreign investors, they can only buy properties in designated freehold areas. Only these places will grant them full ownership rights. 

Golden Visa

Dubai grants a golden visa residency for foreign investors and expats who will invest in real estate properties amounting to AED 2 million or more. Having this visa allows investors to access several benefits that UAE residents can otherwise enjoy.

Rental Laws

Different properties answer to different rental laws and regulations. Generally, RERA governs all real estate transactions and oversees the relationship between landlord and tenant. 

Fees and Costs

You should never take for granted the fees that you need to pay within every process of your rental property journey. This includes DLD transfer fees, service charges, management fees, and more.

Seal the Deal

After you completed your due diligence and have taken all considerations to heart, you are ready to purchase your first rental property in Dubai. 

To make this a smooth sailing process, you can easily tap on APIL Properties to secure your property. Whether you want a ready-property, off-plan, residential, or even commercial, we have all these properties in our grasp.

Documents that you will be required to pass to purchase properties include:

• Passport
• Residency Visa
• Purchase and Sale Agreement
• No Objection Certificate
• Power of Attorney (if acted with a representative)

Effectively Manage your Properties

After you have sealed the deal and paid all necessary fees, you can immediately start earning rental income for these properties. Moreover, the best move to effectively manage your rental properties is to hire a professional property management company to do it. They will:

• Find good tenants
• Schedule routine maintenance to keep the property’s condition
• Manage rent collection and appropriating this to the maintenance cost, management fee, and more.
• Expertly keep tenants happy 
• Making sure your properties comply to legal regulations

Conclusion

Investing in rental properties as a beginner in Dubai needs careful planning, research, and understanding. However, if you partner with a reliable property management company like APIL Properties, you can significantly make your journey easy. We are experts that will lead you to understand how the rental market works and help you find the right rental property. 

Moreover, we can evaluate your properties and implement strategies to maximize rental income. Plus, with our trusted guidance, we ensure that every process is legally compliant and stress-free for our clients. Explore Dubai’s ever-growing rental market by investing in rental properties with APIL Properties.

FAQs

Is it worth investing in rental properties in Dubai as a beginner?

Yes. The Dubai rental market is relatively steady and continuously booming. It also provides high gross rental yields to some of its best communities.

What are the first steps you need to take when investing in rental properties?

The first major step in investing in rental properties in Dubai is to choose what type of properties you want. 

What are the types of rental properties in Dubai?

Residential and commercial are the main rental property types in Dubai. Investors can also choose to buy off-plan or ready properties depending on their preferences and budget.

Can you buy a rental property in Dubai from the UK?

Yes. Foreigners can buy rental properties in Dubai provided that they do so in freehold areas and adhere to the laws and regulations of the city.

Can you have full ownership rights for properties in Dubai?

For foreigners, the full ownership rights for properties in Dubai are only granted to freehold communities. This includes Downtown Dubai, Dubai Marina, Palm Jumeirah, Palm Jebel Ali, and more.

Is it easy to invest in rental properties as a beginner in Dubai?

Investing in rental properties in Dubai as a beginner can be a bit daunting. However, if you partner with a good property management company like APIL Properties, you can secure a smooth and stress-free investment journey.