Expat property investors in Dubai advised to go for smaller units

Expat professionals investing in buy-to-let apartments in Dubai are being advised to choose smaller units.

Property investment in Dubai is the choice of many expat professionals looking for a good return for their spare cash, but opting for larger, grander apartments won’t necessarily be the best idea as regards returns. Many novice property investors believe a large property equals large returns but, according to professionals in the sector, the reverse is usually true in the majority of cases. Large, luxury properties are known to come with high service charges a well as tying up an equally large amount of investors’ liquid cash, with the higher rents achieved eating into the base figure’s percentage.

For a higher yield, lower cost, smaller apartments are the best bet after taking into account that well-known phrase or saying as relevant in Dubai as it is in the home country – location, location, location! In addition to choosing a good location, other considerations include the rental sector’s strong demand for smaller, less costly accommodation as well as the initial lower cost of furnishing a smaller apartment for rental purposes. For example, a studio flat in the Discovery Gardens development can be purchased, furnished, fitted out and set up and running for less than £100,000, with the expected gross profit of 11-12 percent and an estimated net gain of eight per cent.

It also pays to realise that a larger apartment at a cheap price may not be of sufficient quality to be suitable for renting out. Shoddy builds don’t attract renters, and cost far more to maintain, hitting on net profits as a result and proving the wisdom of quality over quantity. In addition, aiming a buy-to-let investment to new expat arrivals once the new long-term visa kicks in is the sensible option, thus taking advantage of extra demand for value-priced property.