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People with real estate in Dubai, what is your ROI from renting/AirBNB?
- Thread starter PinkCat
- Start date
too many factor
4% net i think. But with capital at risk as there is no appreciation really - so be prepared to say minus. sure there is plenty of speculation of sh*t estate agents and the fact the DLD does not allow a piece of land to be sold for too much less than what was paid for, thereby helping the inflated BS prices. most of the numbers you see online are before the taxes. Silly me, there are no taxes in Dubai...... only fees..... and there are plenty of BS fees
4% net i think. But with capital at risk as there is no appreciation really - so be prepared to say minus. sure there is plenty of speculation of sh*t estate agents and the fact the DLD does not allow a piece of land to be sold for too much less than what was paid for, thereby helping the inflated BS prices. most of the numbers you see online are before the taxes. Silly me, there are no taxes in Dubai...... only fees..... and there are plenty of BS fees
What are property management fees like in a high rise building? For a 1BR apartment?
We tried and crunched numbers for prime quality in prime location and came to the conclusion that short (managed by a 3rd party) vs long-let doesn’t actually make a big difference for this kind of property. The only scenario where short-letting made sense was where a certain owner-use is required.
Would personally not buy prime location at this point in time. Correction will likely be coming. Princes are at the peak. Look at good vs prime locations. Still can buy studios and one beds in JVC that gross return 10% (long-let). Have seen some deals recently.
Would personally not buy prime location at this point in time. Correction will likely be coming. Princes are at the peak. Look at good vs prime locations. Still can buy studios and one beds in JVC that gross return 10% (long-let). Have seen some deals recently.
You can check full fees for every building in Dubai at DLD. Just use the "Select on Map" and select the location and then the building from the drop down list to see charges.
https://dubailand.gov.ae/en/eservices/service-charge-index-overview/service-charge-index/#/
I bought a property about two years ago in sub prime area. Rented since.
Getting a total of 8.75% and when I take out the service charges the net return is 7.44%.
This is the long-term rental.
The math with AirBnB is different as you'll need to furnish the apartment, your furniture will degrade over the time and returns also depends on occupancy rates etc.
It should be more lucrative but also needs more work. At least in the beginning. A lot of the things could be automated now days but still it's not as simple as collecting a check.
Depends on many factors (what amenities building has, how much maintenance work it requires etc).
For a typical 600sqft 1BR you're looking at around AED 9-10k/year (usually paid quarterly).
Getting a total of 8.75% and when I take out the service charges the net return is 7.44%.
This is the long-term rental.
The math with AirBnB is different as you'll need to furnish the apartment, your furniture will degrade over the time and returns also depends on occupancy rates etc.
It should be more lucrative but also needs more work. At least in the beginning. A lot of the things could be automated now days but still it's not as simple as collecting a check.
For apartments it's usually around AED 15-20/sqft per year.
Depends on many factors (what amenities building has, how much maintenance work it requires etc).
For a typical 600sqft 1BR you're looking at around AED 9-10k/year (usually paid quarterly).
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I was in a meeting today with Binghati sales rep and he claims that hyper luxury apartment in prime area can do up to 20% annually with short term rents, I was skeptical, but if you can achieve 9% in sub prime area with long term rent now it suddenly looks believable.
Also they can fully manage it for you.
Anyway would like more concrete data on that
Also they can fully manage it for you.
Anyway would like more concrete data on that
Suggest you look up two investment companies which sell '% partial ownership' stakes in properties (of which I have a financial interest in more than 10).
One is called 'STAKE' the other 'SMARTCROWD', and both are regulated by the authorities.
Their sites/apps give many examples of margins/gains p.a. and also on the property exit resale values after 2 or 3 years.
Another site/app which gives a great amount of information on RE is 'DXB Interact'.
ROI on rentals is running at about 5-6% net, and property re-sale values depend on many factors, but generally more than 7.5%
There, that should keep you busy ........................
One is called 'STAKE' the other 'SMARTCROWD', and both are regulated by the authorities.
Their sites/apps give many examples of margins/gains p.a. and also on the property exit resale values after 2 or 3 years.
Another site/app which gives a great amount of information on RE is 'DXB Interact'.
ROI on rentals is running at about 5-6% net, and property re-sale values depend on many factors, but generally more than 7.5%
There, that should keep you busy ........................
I was curious about the Stake so created account there just to check checked the properties that are listed.
I checked a number of prime location properties that are listed there for more than a year (so I can see the returns).
And the returns are about 8-9% BUT those are not net returns! The net returns are about 4% - 5%..
There only one property was actually sold so you don't have much metrics on that part of the deal (price appreciation).
Also, the rental prices in prime locations have dropped for about 20%
https://www.arabianbusiness.com/ind...e-areas-fell-over-20-in-third-quarter-of-2023
So that might bring down a bit the rental returns on the platform in the future as well.
What I didn't like about this:
You can't get your money back if you need the money quickly (for eg. if you're very sick and you need money) as there is no secondary market where you could sell your stake to somebody else (or I didn't find it).
Yes, it's a long term game BUT I can sell my property whenever (even below the market price) if I needed money.
Also, in case you invest in REIT on a stock market you can get about the same returns and you can get your money back with a click of a button within a day.
So, as many things in UAE, it looks good on the paper but in reality it's not that good.
Maybe it will turn out to be a good model but it just takes more time.
Samples #1:
Sample #2:
I checked a number of prime location properties that are listed there for more than a year (so I can see the returns).
And the returns are about 8-9% BUT those are not net returns! The net returns are about 4% - 5%..
There only one property was actually sold so you don't have much metrics on that part of the deal (price appreciation).
Also, the rental prices in prime locations have dropped for about 20%
https://www.arabianbusiness.com/ind...e-areas-fell-over-20-in-third-quarter-of-2023
So that might bring down a bit the rental returns on the platform in the future as well.
What I didn't like about this:
You can't get your money back if you need the money quickly (for eg. if you're very sick and you need money) as there is no secondary market where you could sell your stake to somebody else (or I didn't find it).
Yes, it's a long term game BUT I can sell my property whenever (even below the market price) if I needed money.
Also, in case you invest in REIT on a stock market you can get about the same returns and you can get your money back with a click of a button within a day.
So, as many things in UAE, it looks good on the paper but in reality it's not that good.
Maybe it will turn out to be a good model but it just takes more time.
Samples #1:
Sample #2:
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He just want to sell. The returns willl probably be smaller since the apartment will be empty May-September and the Airbnb management takes around 20-30%. Its also very high competition.
All good points - I accept - however one of those outfits (I don't remember which of STAKE or SMARTCROWD) twice a year has a market sell off period, so you can get out of your deal, albeit admittedly not immediately, but twice a year.
That's actually good option. Even twice a year is not that bad.
I've seen that on Stake some of the investments are 5 year deals and that properties will be sold after 5 years so the investors will then get their money than + appreciation (hopefully). In the meantime they get monthly payouts from the rent.
I've seen that on Stake some of the investments are 5 year deals and that properties will be sold after 5 years so the investors will then get their money than + appreciation (hopefully). In the meantime they get monthly payouts from the rent.
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