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Four easy mistakes to make when buying property in Dubai

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By Rakesh Mirchandani
21 Jul

After working in the Dubai property market for 17 years, we have seen many trends. The market here can be volatile, the cycles are shorter than other developed real estate markets, but it’s always exciting. There are definite ups and downs and, thankfully, we have been on the winning side more often than not. Our clients trust us, and believe our assessments which are based on facts (we share current market analysis and reports which base on recent transactions and current offerings). However, there have been times when we’ve got things horribly wrong, and rather than just share the successes on this blog, we thought it’d be helpful to also tell some stories of the mistakes we’ve made which will hopefully save you a lot of pain and money.

Here are four easy mistakes you can make when buying property in Dubai.

Mistake One: Make a decision with your heart, not your head
We have all seen something in a shop and bought it without thinking. Perhaps you saw an item in a mall, bought it and it was only when you got home that you really asked yourself if it was a wise purchase. Sadly, the same can happen with properties. Prior to 2008, Dubai was booming and investors were buying and selling properties within a few weeks and making huge returns. We’re ashamed to say we lost more than $1m in 2008-2009 by investing in the wrong areas and buying off-plan properties without researching developers and their track records. When the recession came we paid a huge price. Thankfully we’ve learned our lesson… when the Bluewater Island development came to market we took a calculated risk and bought there. There were rumours the Dubai Eye wheel might not be completed and the island wasn’t occupied. We set up a great payment plan and four years later, the property value has doubled. We personally lived there until recently, but now rent out and have obtained an ROI of over 10 per cent net per annum.

Mistake Two: Trust everyone in the Dubai property industry
In a highly competitive market where there is constant movement and pace, it’s very easy to get carried away when buying a property in Dubai. Before you do a deal with any agent, you should check that they are RERA registered – this means they have been regulated and are qualified to give proper advice to you. All agents should have an office registration number (ORN) and brokers should have a broker registration number (BRN). If you have a problem, this means you can complain and RERA can investigate. We ensure ALL our agents at RNR are regulated and trained, as we don’t want them giving bad advice on behalf of our company. You should be particularly wary of sales agents who promise you that your property value will double in 2-3 years’ time. We always remain conservative with our intel and predictions and we actually pay for data to ensure we aren’t just speaking our opinion, but actual facts.

Mistake Three: Fail to research the property you’re buying
Before you buy a place, make sure you research the property as much as you can to fully understand the location you’re buying in. You can even do this on Google Maps and work out the distances to key attractions and venues. There is lots of false advertising in Dubai – agents will claim a property is ten minutes from the airport when really it’s 20, and you don’t want to get stung by failing to understand the key facts about your property. Also, it’s worth researching service charges and any ongoing costs. Again, failure to do this can be catastrophic for your ROI figures.

Mistake Four: Fail to read the small print on finance deals
Whilst lots of buyers pay cash for properties in Dubai without bank finance, there are many incentives out there. Before 2008, we were buying lots of property off market and with one particular development, the project is STILL not completed. That’s right, 15 years we’ve been waiting for this development to finish. Banks can lend 50 per cent for an off-plan or under construction property only after the client/owner has paid their contribution of 50 per cent. Our suggestion is to ALWAYS read the small print and ensure you’re not going to get stuck in a mess that you can never pay back.

Tags: RERA Off-Plan Villa Townhouses News Blog Lifestyle Travel


Ali | 21 Oct 2022

Appreciate your honesty Rakesh. It's refreshing to see someone admit to their mistakes so that we can learn from them.


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