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How we choose off-plan property for investment in Dubai

Many investors worldwide are currently drawn to Dubai's real estate market, and for a good reason. In August alone, there were 12 000 transactions made. It's an extremely lucrative asset that delivers high passive income. However, to achieve good profits, it's crucial to select the most promising property, and doing so without expert assistance is nearly impossible.

Would you like to know how professionals assess off-plan properties for investments? Our team of analysts selects investment properties in Dubai based on 150 criteria. In this article, we'll list the most crucial ones and provide explanations.

The main groups of parameters for analysis are the investment profile and the fundamental characteristics of the property. We'll elaborate on the essence of each point in detail.

A well-thought-out strategy is a key point in choosing an investment property. Firstly, you need to ask yourself questions like:

  • How much am I willing to invest?
  • How long am I willing to wait for the return of the invested capital?
  • What level of returns do I expect? Does it align with the real market situation?

Then, you need to calculate the risk coefficients — factors that could negatively impact the success of investments. Manageable risks include documentation transparency, property location, taxation, market share of a specific type of real estate, and others. Unmanageable risks could arise from Dubai's fluctuations in the global oil market, stability of the tourism industry, demographic trends, geopolitical factors, and so on.

An analysis of actual liquidity is a mandatory step when investing in real estate. The liquidity of a property depends on its location, quality, condition, specific features, market activity, demand-supply dynamics, and several other factors.

The first step in choosing real estate is to evaluate the reputation of the developer. If there are doubts about the developer, then there's no point in considering the property. The top 10 reputable developers in Dubai include:

  • Damac Properties
  • Dubai Properties
  • Emaar Properties
  • LIV Developers
  • Nakheel
  • Omniyat Properties
  • Sobha Realty
  • Select Group
  • Ellington Properties
  • Meraas Holding

Once you've determined the developer, it's crucial to thoroughly check their construction documents from engineering to geotechnical surveys, as well as the presence of escrow accounts. Escrow accounts are where the funds paid for the property are held by a guarantee bank during the construction phase. The developer only receives this money after the property is completed.

Assessing the property's value is a significant aspect, but only a professional can carry out such an analysis. Here, it's necessary to compare the cost of the chosen project with other market prices to understand its fairness.

The choice of the preferred stage of readiness and the period of entry into operation is up to you, as each investor has their strategy. However, it's essential to consider this point in one way or another.

The aforementioned indicators will assist you in selecting an investment property in Dubai, but these are just the tip of the iceberg. Besides these, it's crucial to strategically evaluate the property's location, potential for value growth, and numerous other factors.

We will write about how to choose the most profitable property location in another article on our blog. Don’t miss out on important insights about investing in Dubai's real estate.