When it comes to investing in properties in Dubai, you might have already heard the term “shared ownership” or “fractional ownership.” In 2022, this shared ownership scheme has gained popularity with investors.
And you might be wondering if this is a good idea in Dubai. For the most part, yes, it can be a smart move. It is a low-risk investment with high potential for income generation.
However, like any other investment, there are a few things to consider before choosing shared ownership properties in Dubai. Let’s talk about its benefits, considerations, and if shared ownership is right for you.
What are shared ownership properties in Dubai?
Shared ownership properties in Dubai allow up to 4 investors to own a particular property. It is an investor-oriented structure wherein you’ll only own a portion of a property instead of the whole asset.
Additionally, this also means that the costs and potential income generated from the property are shared. Hence, you will pay less on the initial cost of buying the property, property management fees, and maintenance fees.
Benefits of Shared Ownership Properties in Dubai
There are several reasons why shared ownership properties in Dubai are becoming an appealing option for investors.
Reduced Financial Cost
The key benefit of shared ownership is being able to only pay for a fraction of the total cost of buying a property. This results in less financial burden as the cost is spread out amongst multiple investors.
At the same time, fractional ownership allows you to select thoroughly amongst upmarket properties. With proper guidance and research, this can also lead to higher returns in the long-run.
Investment Diversification
You can diversify your investment portfolio by investing in multiple properties. By doing this, you are also lessening your risks and investing in different types of properties.
Additionally, you can invest in hotels, apartments, and commercial offices. If a property type takes a hit, you still have other investments in your portfolio.
Potential for Strong Returns
Just like with full ownership, with a unified agreement, the investors can earn money from the property through rent or appreciation. Therefore, if the property value goes up or it’s rented out, the profits are distributed among the co-owners.
Flexibility
With shared ownership properties in Dubai, you can easily sell your shares to other investors. This provides more flexibility than having to sell the whole property itself, which may take more time.
Easy Property Management
Most shared properties in Dubai are managed by professional property management companies like APIL Properties. We handle daily tasks like communicating with renters, collecting rent, maintenance, dispute resolution, and more.
Secure Property Regulations
Dubai is known for its secure and clear regulations when it comes to properties and that includes shared properties. This is why shared ownership properties in Dubai will give you peace of mind and boost your confidence to invest.
Considerations Before Committing to Shared Ownership
While shared ownership properties in Dubai offer great benefits to investors, it is also important that you weigh down on some challenges.
Disagreements Among Co-Owners
With multiple people owning the property, decision-making can become tricky. There is always the challenge of potential agreements within each other. This is why a comprehensive and solid co-ownership agreement is important to avoid conflicts and set down ground rules beforehand.
Unequal Contribution
There may be times when one owner may feel that they are contributing more than others. This can happen either by devoting more time or contributing more financially for the property. Again, having a clear guideline and agreement with the investors can prevent this from happening.
No Full Control Over The Property
With shared ownership properties in Dubai, no single investor has full control over the property. Every decision regarding the property requires the consent of all the investors.
Inheritance Issues
Succession plans have to be clearly specified on the investor’s will to prevent disputes from happening. You have to outline your will accordingly to follow through on the shared investment.
Is Shared Ownership Properties in Dubai Right for You?
In conclusion, shared ownership in Dubai can be your big break in the real estate market. This offers several benefits, like less financial cost, diversification, flexibility, strong returns, and secure regulations.
However, like any investment, you also need to take account for the downsides. This includes disagreements, unfair contributions, restricted control, and inheritance issues. But through proper agreements and guidelines, these challenges can be easily managed.
Additionally, you can even consult APIL Properties to help align your investment goals to the end result. Our team has substantial market knowledge to lead you through the best decision you need to take.
FAQs
What are shared ownership properties in Dubai?
Shared ownership properties in Dubai pertain to an investor structure wherein you will only have rights to a portion of the property. Hence, unlike full ownership, you will not have the full rights and control over decisions regarding the property.
Is it possible to buy properties in Dubai with more than two people?
Yes. Multiple investors, usually up to four people, can have a shared ownership for properties in Dubai.
What are the benefits of shared ownership properties in Dubai?
Shared ownership in Dubai offers reduced financial costs, investment diversification, potential for strong returns, flexibility, easy management, and secure regulations. Plus, you can even elevate these benefits by partnering with experts like APIL Properties.
What are the downsides of shared ownership?
Shared ownership properties in Dubai can lead to disagreements, conflict with contributions, restricted control, and inheritance issues. However, this can be easily managed through clear co-agreement and guidelines.
