How to make money in real estate in Dubai: opportunities and profitability

Dubai as a center for attracting investments

In recent years, Dubai has stood out as one of the most desirable investment and living destinations, especially among financially well-off Russian residents. The reasons for this interest lie not only in the availability of convenient direct flights, but also in the limited options that Russians have for purchasing homes outside the country. A huge number of people from all over the world pay attention to Dubai due to its stable economy, flexible immigration programs and great opportunities for real estate investments.

The economy of Dubai

Dubai's economic position in the region is undeniably important, as it ranks second among the countries that make up the UAE. According to recent data, this union holds 10.2% of the total financial wealth in the Middle East and Africa. Forecasts from the Boston Consulting Group indicate impressive growth in this figure, with financial assets expected to reach one trillion dollars by 2026. In mid-2022, Dubai's economy showed its best performance since the summer of 2019, as confirmed by positive ratings from Standard & Poor's, indicating that the region has successfully emerged from the impacts of the pandemic.

Economic diversification

It should be emphasized that, unlike other emirates, Dubai does not rely solely on oil revenues. The United Arab Emirates as a whole is considered to have the most diversified economy among the Gulf countries, and this process has achieved particularly high results in Dubai. The main task of government management remains the further development of the non-oil sector.

Growth of non-oil trade

In the first half of 2022, the trade volume of non-oil products exceeded one trillion dirhams for the first time in history, reaching 431 billion dollars, which is 17% higher than the figures from the previous year.

Cultural diversity of the city

Dubai has become a permanent residence for many expats, who make up over 80% of the city's population. This creates a unique cultural atmosphere and fosters the exchange of experiences and ideas. Open immigration procedures and the provision of opportunities to attract talented individuals from abroad further contribute to the region's development.

Investment opportunities

For those interested in real estate investments, it is important to consider that the minimum amount required to obtain“golden visa”, amounts to$545,000.This program offers potential investors the opportunity to secure a stable annual income starting from5%to10%Depending on the type of rental. Additionally, the absence of personal income tax makes real estate investments particularly attractive.

Income opportunities

Dubai also offers a wide range of opportunities for earning in the real estate market, including:

• Short-term rental
• Long-term rental

Investors have the opportunity to increase their income by purchasing real estate during the construction phase and then reselling it. The legislation reliably protects the rights of those who invest, especially in the early stages of a project.

Benefits of being a Dubai resident

Residents of Dubai enjoy a multitude of benefits, such as:

• Opening of bank accounts
• Submitting applications for Schengen visas
• Obtaining type D visas
• Visa to the USA without any hassle

Moreover, Dubai offers an attractive tax climate and a real opportunity to become a tax resident. Organizing your own business or registering as a self-employed person is also easy.

The future of Dubai

Dubai continues to attract more and more investments and is becoming increasingly important in the eyes of global capital. It is no secret that it is rapidly becoming a popular place to live and work. Considering the stability of the economy, the diversity of opportunities, and the favorable tax system, Dubai is creating unique conditions for both business and personal growth.

Dubai as a center of attraction

Many people from various fields are flocking to Dubai: from businessmen and artists to students and highly skilled professionals, and this is largely due to the wide range of visa and immigration programs available.

Special economic zones with favorable tax and economic conditions have been developed to attract foreign investors.

Dubai also attracts wealthy individuals, and their numbers are growing every year. According to forecasts by experts from Henley & Partners, by 2030, Dubai will be among the twenty richest cities in the world. At the beginning of 2023, there were approximately 67,900 millionaires and 13 billionaires in this emirate.

Real estate market and the risk of a bubble

As for the potential formation of a bubble in the real estate market, the Swiss financial group UBS is confident that the likelihood of this happening in Dubai is very low.

This is related to the fact that:

• Real estate valuereflects real economic conditions.
• It is increasing due to the increase inpopulation income.
• Rise in oil pricescontributes to an increase in real estate prices.
• High return on investment speedInvestments in rental properties are also a factor of stability.

Currency aspects

The national currency of the United Arab Emirates, the dirham, has been pegged to the US dollar since 1978 at a rate of 1 $ = 3.67 AED. This helps to minimize currency fluctuations and, as a result, protects the UAE's economy from sharp price changes and capital flight.

Strategies for making money in real estate

When it comes to ways to earn money in the real estate market in Dubai, our clients usually follow two main strategies:

• FirstThe category of buyers intends to rent out their property.
• Secondcategory invests in the early stages of construction for the purpose of resale at higher prices.

Rental yield

When it comes to rental yields, apartments in Dubai can generate profits from both short-term and long-term rentals.

Investors often choose hotel rooms for short-term rentals, as this frees them from the hassle of:

• looking for tenants,
• settlement,
• property management.

Hotels take care of all the nuances of rental, including marketing, maintenance, and cleaning. The profitability of such properties ranges from 6 to 12 percent per year.

On the other hand, long-term rentals also have high demand, as more than 80% of Dubai's population are foreigners, making it relatively easy to find tenants. The expected return from long-term rentals averages between 4 to 6 percent.

Investments at the construction stage

In conclusion, it is worth noting that the rapidly rising real estate prices in Dubai make purchasing properties during the construction phase attractive. Many people want to buy homes while they are being built, so they can sell them immediately after completion and profit from the increase in value.

This can be a risky business, as successful early-stage investments can significantly improve financial results.

Denis, our client, was inspired by a unique real estate investment strategy that he successfully applied. He invested in three studios in a new residential complex, and just two weeks after making his initial payment, the developer announced a 10% increase in apartment prices for this project. Meanwhile, Denis's total expenses amounted to only 4%, allowing him to gain a 6% increase in the value of his new properties in just a few weeks.

Risks of investing in real estate

Ksenia Kolesnikova, the head of the sales department in Dubai, emphasizes that every investor must clearly understand the risks that may arise during investments: there is always a possibility that the financial market may slow down or even crash.

General information about Georgy Kachmazov

Georgy Kachmazov is the founder of our company, and our team is engaged in the monthly collection of information on the cost of real estate at the construction stage based on data from the Dubai Land Department. This valuable information is presented in our regularly updated review titled "Dubai Areas for Investment and Living." We strive to help you find the right property that meets your needs.

Support in choosing real estate

We are ready to assist you in choosing the property that suits you best. Leave a request, and our manager will be happy to help you find the optimal option.

Banking services and resident visa

In the context of life, travel, and doing business with a residency visa, opening a bank account in the United Arab Emirates is an important step. The banking system in the UAE is known for its high level of reliability, and local banks are popular among many expats.

• The process of opening an account for Russians with a resident visa (Emirates ID) goes smoothly without any major difficulties.
• Accounts are not blocked, and there are no restrictions on their use.

Obtaining a Schengen visa

When it comes to applying for a visa to Schengen countries, there are currently long queues at Russian embassies, which can drag on for months. It is important to note that visa applications can generally only be submitted from a country where the applicant has legal residency.

However, having a UAE resident visa significantly simplifies this process, allowing you to apply at one of the European embassies located in the United Arab Emirates much faster than from Russia.

Obtaining a visa to the USA

The process of applying for a visa to the USA also has its own peculiarities. Unlike Schengen visas, you have the option to submit documents from third countries where you are not a resident. A UAE residency visa significantly simplifies this procedure, as residents of the Emirates have additional opportunities for scheduling visa interview appointments.

Tax regime in Dubai

The tax system in Dubai attracts the attention of many. It is characterized by the following aspects:

• The absence of personal income tax:This concerns salaries, rental income, dividends, and income from securities.
• There is no annual property tax or inheritance tax.
• Corporate tax:It is currently at 0%, but is scheduled to be introduced in 2023.

It is important to remember that having a resident visa does not automatically make a person a tax resident of the UAE. A foreigner can become a tax resident of another country if they stay there for more than 183 days in a year.

Opportunities for foreign entrepreneurs

Foreign businessmen have the opportunity to open a business or register as self-employed. The authorities in Dubai are actively working to simplify the company registration process for foreigners, as this contributes to the economic development of the emirate.

Conclusion

In conclusion to my article, I would like to emphasize that investing in Dubai real estate is not only a relevant but also a highly promising opportunity for generating stable income. Considering the dynamic development of the emirate's economy, its favorable tax conditions, and various immigration programs, Dubai is becoming increasingly attractive for both foreign investors and individuals looking to live and work steadily in this metropolis.

Sustainable economic growth

In terms of the economy, Dubai is showing steady growth rates and is actively overcoming its dependence on oil, which demonstrates the reliability and viability of its market. In addition to this,low risk of price bubbles formingThe high rental yields in the real estate market make investments in property in this region extremely attractive.

Social aspects

We should not forget about the social aspects of Dubai — as a city that has provided a home to many talented people from around the world. It creates additional opportunities for business and career growth, and the peaceful life in a diverse cultural environment attracts more and more expats.

Advantages of the "golden visa"

Introduction“golden visa”The provision granting residents the right to permanent residency has become another incentive for real estate, creating additional advantages for anyone considering this option as a long-term investment strategy. As a result, Dubai is not only attracting capital but also strengthening its position on the global stage as one of the most promising centers for business and investment.

Final thoughts

Thus, Dubai, with its attractive economy, unique opportunities, and favorable business climate, remains one of the best places for real estate investment, opening doors to financial prosperity and new life prospects. I hope this article helps you gain a deeper understanding of all the advantages and opportunities that await you in this amazing city.