Villas in Dubai are a common sight and type of accommodation in the Emirate. In 2014, Dubai was announced best city for real estate investment returns.
New villa development projects are springing in Dubai one year after the other. As the real estate market is growing steadily, many investors, including foreigners, are turning to villas and particularly beach villas for property investments.
In 2002, Dubai’s crown prince, Hamdan bin Mohammed Al Maktoum, issued the Freehold Decree, formal legislation that allowed foreigners to buy property, sell property, and lease or rent property at their own discretion.
If you’re making the decision to buy a beach villa (beaches are plentiful in Dubai), it is important you consider some crucial factors. Here are few factors to help you make the right purchase decision.
Location and neighborhood
There are numerous beach neighborhoods in Dubai with different types of villas to choose from. Villas can be from 3 to 7+ years old. Some share a community swimming pool. Others have their private pools, yards, etc. Location matters based on amenities offered, proximity to schools for the children or future children, and proximity to work. Even the ‘feel’ of the community would differ from one neighborhood to another. Jumeriah neighborhoods are mostly populated by wealth-ier expats from all over the world. Jumeriah is the old coastal line of Dubai, near Burj Al Arab hotel and island. Here are few neighborhoods to choose from:
- Jumeirah 1,2,3
- Umm Suqeim
- Jumeirah Beach Residence
- Palm Jumeirah
Credentials of the developer
Oftentimes, prospective owners will buy incomplete villas or villas that have not been built yet. Before you go ahead with your purchase decision, check the credentials of the developer you intend to buy from. Look up previous projects and accommodations they built. Do your own first-hand research and ask for personal recommendations.
When dealing with a developer, a fee of between two and five percent of the selling price is expected to be paid out in addition to the property price. It is also advised that you hire an attorney if you were to move forward with your purchase decision. Here is a list of the most known realty developers in Dubai:
- Emaar Properties
- Dubai Properties
- Nakheel Properties
- Sama Dubai
Return on investment (ROI) and re-sale value
Prices differ obviously in Dubai from Jumeirah to Deira so decide on a budget and then a location if you cannot afford the little extras. Alternatively, adjust your budget to your favorite location/residential community.
If you intend to resell your new property or rent it to new tenants, Dubai areas have different ROI’s which are as often as high as 8 to 10%. Do your own research and calculate which type (or size) do have currently (or in the future) better rental yields. Hint: Family-sized (3 bedrooms), smaller and newly built villas have a better rental yield than luxury 7 plus-bedroom villas on Jumeirah Beach.
Before you sign in to give away your hundred thousand Dirhams, make sure to factor the long-term growth of your family. If you’re planning to house a bigger family or perhaps move in your parents inside the same villa, you may want to consider 4+ bedroom villas. Different villas come with different maid accommodation facilities. If you intend to employ more than one stay-over maid or helpers around the villa, the make sure to factor their accommodation into the size equation.
Maintenance and service fees
Along with the developer, make sure your villa or the community villas use a reputable maintenance agency. It is often difficult to also add or alter the architectural style of your villa if you live in a community without the consent of the developer. Any major reparation will also require the consent of the developer.
Service fees are the recurring monthly fees. They’re tied to amenities (such as car parking) offered in your residence and often come as post-purchase expenses.
If you’re looking for property investment proposals in Dubai, check out our new Dubai Investment Proposals section.
Five Factors To Consider When Buying a (Beach) Villa in Dubai
As the real estate market is growing back steadily in Dubai, many investors, including foreigners, are turning to villas for property investments. Here are few factors to help you make the right purchase decision.