High Yield Advisors: Real estate investment advice for first-time investors in the UAE
Investing in real estate overseas can seem a daunting task. Especially for first-time investors. However, choosing the correct real estate asset can deliver a great investment and yield promising financial results.
High Yield Advisors (HYA) put together a list of fundamentals that first-time investors should consider when selecting properties to build their investment portfolio:
- Quality of the construction
- Market Appeal
- Quality of the Maintenance
Location is always a key factor for both tenants and investors when selecting a property. “It is important to understand the area and analyse key factors such as transport links, access to leisure and health facilities, dining and the surrounding environment, all of which should be taken into consideration when assessing a properties location.” Quoted Patrick Parmeggiani, Partner at HYA.
Due to a high number of developers and construction companies in region there are some concerns surrounding the quality of the construction in many of Dubai’s developments. “Additionally, investors should pay particular attention to the quality of construction, overall finish, materials used, floor plan layout and building amenities. All of which can have a considerable effect on the financial performance of the investment.” Said Marcello Arcangeli, Partner at HYA.
The overall appeal of a property is determined by its demand in the market place. “In areas such as JLT and Sports City it is clear that there is an increased demand for specific buildings. By choosing the right building in the community investors can expect increased rental yield, less vacant periods, and a faster selling time if needed. There is more to just analysing a buildings location in terms of whether it is close to the metro station and amenities. Although that is important, in Dubai there is a sense of knowledge between tenants and real estate advisories that know the premium buildings for both investment and tenants.” Said Giovanni Caradonna, Partner at HYA.
The quality of the previous maintenance and the requirement for ongoing maintenance of a property is a factor that greatly affects an investment and its rental yield. “A unit that requires substantial maintenance before it will be ready for rental will delay its income generation and lower the annual yield. High ongoing maintenance requirements are another factor that affects overall yield. Analysing past maintenance records enables investors to avoid high maintenance properties.” Said Marcello Arcangeli, Partner at HYA.
Considering these four parameters will build a good foundation for investors thinking to purchase real estate in Dubai. On the other hand, sourcing and using the experience and knowledge of real estate market experts can support the decision-making process and ultimately affect the longevity of a successful investment portfolio.