- Speculative – Speculative Purchase units at the beginning of construction or during the pre-launch phase when the developer has just announced the project.
Goal: Profit from reselling at a later stage of completion or after commissioning when the prices of units in the project have increased.
Profitability: 15% – 80% per annum
Risks: The less known the developer is and the fewer projects they have completed, the higher the risks.
Important: If the unit is bought in instalments, resale is only possible after payment of 30% to the developer.
- Conservative Purchase apartments and villas in the middle or final stage of construction for rental purposes.
Goal: Generate a stable income for several years with subsequent resale.
Profitability: Average of 10% per annum for short-term rentals and 7% for long-term rentals. For comparison, here are the profitability rates for long-term rentals in other megacities: London 2.6% New York – 5% • Paris – 3.5% Additionally, there is potential for capital appreciation.
Risks: Increase as the rental supply exceeds the demand in a particular district.
Important: For long-term rentals in Dubai, the landlord can increase the rent once a year by a maximum of 15%. There are no such restrictions for short-term rentals.
- Flipping – Purchase ready properties and enhance their features: design renovation, furnishing and appliance installation, landscaping etc.
Goal: Generate profit from reselling fully furnished properties at a higher price.
Profitability: 20% – 30% per annum
Risks: Risks increase when project selection and work planning are not carefully executed.
Important: Developers in Dubai provide properties with a fine finish, built-in wardrobes, and a kitchen set. Therefore, this strategy is primarily successful in the high-budget segment where there is a demand for ready-furnished units