Hello all Freinds,

How are you doing .

Actually i want to buy an Aparment in Dubai which is think is a very good long term Investment . In the Meanwhile my view point is that Since last 3 years and in next 3 years alot of apartments/villas will add to the market which will decrease the rate of rental income per year .

I want to ask the users view.

Do you think giving a good apartment of rent in Dubai can still give 15% per annum approximate Rental Return in Dubai or not .

How about buying something like a hotel room like Marina 101 or Laguna Tower by IFA Properties which will sell as hotel , bec i still feel hotel rooms or apartments which are sold on daily basis can get 15% - 25% per annum returns .

What do you say ?

Hello Kammy,

You are right, especially with the apartments market, the volume of properties due to be completed in the next few years will be phenomenal.
The rental rates are bound to saturate at some point. Although I don't believe there will be a 'crash' as most people think, becuase demand is still extremley high, you can look at the statistics of Dubai Airport alone over the past five years the number of passengers coming in has more than doubled.
That is why they are building the new Jebel Ali Airport which will be HUGE and converting the old airport to serve short flights like Iran, oman, etc.

Again you are right about the hotel apartments market, I really believe this would be the best investment now and in future. There is big demand for short to mid term stay apartments in Dubai despite the fact that there are so many available in area's like Bur Dubai and Barsha. That is why the big investors often buy them or even convert normal residential properties to hotel Licensed properties.

You can definately earn up to 25% rental return per annum if you short let. But the problem is you need to get someone to manage it for you which will reduce your profit of course. Unless you have the time and resources to find new tenants to stay on regular basis and manage it yourself.

To give you a real life example about the rates and occupancy, I work for a UK based company called MiNC property which does property managment in Dubai & London. We have a couple of buildings in Dubai (Barsha, Marina etc.) which we own and let out as serviced hotel apartments. our average monthly rate for a two bedroom is AED 20K to 25K and our occupancy last year was an amazing 95%!

Our company is also developing a building in Marina called Marina Suites which we are selling as fully furnished and serviced hotel apartments either for investment or to live in. As you mentioned you can name only a few buildings which are Licensed hotel apartments like Marina 101, Laguna Tower etc. which means there is a gap in the Marina for such properties.

I can send you more information on Marina suites if you are interested, it is due to be completed in 1st quarter 2008 and construction has already started a while back. The prices are approx. AED 950 - 1,030 per square foot including furniture and free parking which are very good compared to Marina average. The building is G + 2 + 16.

Sorry if i'm sounding like a sales man!! But honestly even if you decide on this building or any other development like Marina 101 (which I think is also very good) I still encourage the idea of buying a hotel apartment because it is a sound investment.

If you need any advice, I am happy to help!! muawia.khalil@mincproperty.ae


Have a good one...

Great returns as 100.000 new resident come to dubai every year no doublt the returns will b e great for the next 5 years or so specially in short term rentals
Let me knwo if you have any questions
Thanks
Hassan

I have only heard good things of Dubai. Will a crash happen? ???

__________________