IC Properties - FOR SALE!

[stumbled]

hello ,

I currently live in the UK and have a budget (no mortgage) which i would like to invest into buying finished 2 units of 1 bed flats in IC. I may consider studios if the price is right and there is a potential to let them quickly.
If anyone out there has something finished they can contact me with their terms, how long does it take to transfer this(appointments with Nakheel) in short all the information that goes with it,eg documents required, etc etc.
At the moment i will just release my email address and all emails will be replied. You can contact me on sizzlers44@yahoo.com

REGARDS.

[adnan791]

hi I ahve also tried to buy direct from the builder "Nakheel" buthave learnt that the company has hired some broker companies like Gowealthy and landmark. the procedure is also lengthy and difficult to handle from abroad.
Goodluck with your plans.
Adnan

[stumbled]

I am reposting this from the rental forum,i would like people who are investing in IC to comment on it, maybe my sums are muddled up.

I was just doing my sums and they are very simple. For an investor who invests in a 1 bed flat of lets say 716 sqft which are flogging for between 490-540dhs any sector in the IC development.Lets assume they are rented out quickly for dhs54k, not guranteed,it could even take 1 month b4 it goes.
Now, i will employ an agent as i live in the UK, so the fees of 10% is gone straight away. Then there is maintanence of 10.5/ sq ft,which works out to 7518 dhs , which is a standing charge irrespective of wheather you have a tenant or not. The capital growth is Dubai is more likely to become stagnant with so many properties and projects that will flood the market. When one is renting the property the income is taxable anywhere in the world unless you live in Dubai, and that is @ 20% minimum in the UK after taking into account all ur expenses, hmmm, Now, if you want to keep that at a minimum you would need a buy-to-let mortgage, which at the lowest rate today would be about 7.1-7.8% . I still haven't taken into account the ticket costs,staying in Dubai,contract completion expenses..etcetc...remember this is an investment everything is accountable when calculating a return.

Now 54,000 gross income....minus 10% management fee,standing charge of 7518= that gives us a net of 41k, that gives us a return of abt 7.5% if you buy the 1 bed @ dhs540,000.
Studios, i won't even bother with it, as they are saturated and there is nothing left for capital growth in it. With, nakheel holding so many and renting them out for 32k and this rent will be the norm for atleast 2 years with the new ruling where rents can be increased by 7% after that or yearly(not sure on that), they are a waste of time.I think people should cash them in.
I haven't even taken into account my ticket cost,completion,stay in dubai,financial set up costs..etc etc.
Assuming i get a mortgage , the cheapest rate is about 7% on a buy-to-let, maybe these borrowings are cheaper in Dubai,not talking about morgages on property where you live, which maybe cheaper(UK) . If you see where i am coming from it is a loss on your return,unless you live in dubai and you manage your investments, cut corners with furnishings(another cost not accounted yet),no voids etc etc.
I think, this isn't an investment, its more like a loss. People who bought earlier are reaping a nice capital return,BUT ONLY FOR THOSE WHO BOUGHT IN DOLLARS , but nothing special, when this project was launched, the pound was close to dhs5 to £1. Today, £1=7.23.
Thats over 40% decline in the value for those bought when the project was launched.I still haven't taken into account Inflation(loss of value of the dollar worldwide,which has dragged the Dirham with it) and loss of interest over the 3-4 year period for completion of this project. This whole work out is done over my bruch in like 10 minutes, so please correct my mistakes and do comment on this.

regards.

[dave3076]

7.5% NET on a new build in a rising property market in a country with sound political and social structure, AND TAX FREE is pretty good. Try gettin one in the UK. Make sure you put the kettle on before you search tho.....you`ll be there for 10 years!. Also, foreign exchange risk is something that goes with the territory of investing abroad. My advice would be that the worst thing you could do is to sell it. The dollar hasnt exceeded far past 2 to the pound for over a decade, so if you had the same investment, with the same calculations you have done above BUT the dirham was at its median value to the pound of around 5.5, your rental figures and sale prices would increase by nearly 40%. That then turns the net yield into over 10% and your for sale tag at around 90+k. NICE!. For your information, the topic of the dirham splitting its pegs to the dollar has been in the political pot. Maybe 2010-2015. Check out the rates of similar middle eastern countries exchange rates with the pound!. Further to this, you assume the property market in dubai is likely to become stagnant. How and why do you assume this. A body in motion tends to stay in motion. If you quantify demand to supply in figures there is statistical and anecdotal evidence that demand from investors, tourists, workers, and potential ex pats will come flocking. The workforce needed in dubailand alone is likely to half fill international city. I think the future is sound for int city....

[stumbled]

Originally Posted by dave3076

7.5% NET on a new build in a rising property market in a country with sound political and social structure, AND TAX FREE is pretty good. Try gettin one in the UK. Make sure you put the kettle on before you search tho.....you`ll be there for 10 years!. Also, foreign exchange risk is something that goes with the territory of investing abroad. My advice would be that the worst thing you could do is to sell it. The dollar hasnt exceeded far past 2 to the pound for over a decade, so if you had the same investment, with the same calculations you have done above BUT the dirham was at its median value to the pound of around 5.5, your rental figures and sale prices would increase by nearly 40%. That then turns the net yield into over 10% and your for sale tag at around 90+k. NICE!. For your information, the topic of the dirham splitting its pegs to the dollar has been in the political pot. Maybe 2010-2015. Check out the rates of similar middle eastern countries exchange rates with the pound!. Further to this, you assume the property market in dubai is likely to become stagnant. How and why do you assume this. A body in motion tends to stay in motion. If you quantify demand to supply in figures there is statistical and anecdotal evidence that demand from investors, tourists, workers, and potential ex pats will come flocking. The workforce needed in dubailand alone is likely to half fill international city. I think the future is sound for int city....

7.5% nett is my figure after just deducting 2 charges and i have also mentioned if you live in Dubai then the tax free situation,managing the property yourself(one or 2 is ok but then if you have 20 you have to get professional) does help. But, remember these properties are meant also for people who live in India, pakistan,the UK ,USA etc etc and tax has to be paid on your rental return, flight tickets stay in Dubai ,completion costs,void periods,furshings etc etc.
If you want to go into investment yields in the UK,well, being a professional landlord for 10 years the market currently works is adding value to run down properties and moving on,rental yields are as low as 3%.
The only reason, i think property will stagnate if it hasn't already is rates are on the up world wide,completion of alot of projects bringing in supply,investors world wide feel the squeeze as cheap money disappears, then you could always argue that in New zealand with rates of 7.75% hasn't brought about a crash,but then Dubai is still expanding and projects crop up every month,if not every week and most importantly majority of people come there temporarily not for a life time and those who retire only do so cause it's a TAX FREE state, and not for the weather. Is this tax free state going to remain tax free ???
I am sure you are aware with banks already offering rates of 6.3% on your cash and borrowings if not fixed upto 7.5%, you are better off putting your cash in saving accounts .

[dave3076]

Originally Posted by stumbled

7.5% nett is my figure after just deducting 2 charges and i have also mentioned if you live in Dubai then the tax free situation,managing the property yourself(one or 2 is ok but then if you have 20 you have to get professional) does help. But, remember these properties are meant also for people who live in India, pakistan,the UK ,USA etc etc and tax has to be paid on your rental return, flight tickets stay in Dubai ,completion costs,void periods,furshings etc etc.
If you want to go into investment yields in the UK,well, being a professional landlord for 10 years the market currently works is adding value to run down properties and moving on,rental yields are as low as 3%.
The only reason, i think property will stagnate if it hasn't already is rates are on the up world wide,completion of alot of projects bringing in supply,investors world wide feel the squeeze as cheap money disappears, then you could always argue that in New zealand with rates of 7.75% hasn't brought about a crash,but then Dubai is still expanding and projects crop up every month,if not every week and most importantly majority of people come there temporarily not for a life time and those who retire only do so cause it's a TAX FREE state, and not for the weather. Is this tax free state going to remain tax free ???
I am sure you are aware with banks already offering rates of 6.3% on your cash and borrowings if not fixed upto 7.5%, you are better off putting your cash in saving accounts .

Im all ears for a bank account that provides 6.3% net without severe restrictions on a sum of 50k sterling. With respect, the point wasnt about whether you should hold cash right now or not, it was in regard to your comment of SELLING right now. I have for all intense and purposes a dollar asset on a promising development with lots more to come, thats yielding 2 to 3 base points above british interest rates, rising in value(which granted could change) with the dollar sitting at highs against sterling. I totally agree with your analysis on new builds yielding 2 to 3% in the Uk hence i suggested you`de be looking a long time.

[ragga]

If you want anything for rent/sale you can contact me... 050 503 4100 or +971505034100 -- I am not a real estate agent, i just have quite alot of property in international city.. name: Ashok

[stumbled]

Originally Posted by dave3076

Im all ears for a bank account that provides 6.3% net without severe restrictions on a sum of 50k sterling. With respect, the point wasnt about whether you should hold cash right now or not, it was in regard to your comment of SELLING right now. I have for all intense and purposes a dollar asset on a promising development with lots more to come, thats yielding 2 to 3 base points above british interest rates, rising in value(which granted could change) with the dollar sitting at highs against sterling. I totally agree with your analysis on new builds yielding 2 to 3% in the Uk hence i suggested you`de be looking a long time.

Dave, internet is the greatest tool me, u and the our kinds have in todays age. Being a junior member i am not allowed to post urls. But the biggest bank that offers 6.3% is Alliance and leicester offshore bond ON STERLING ,it also provides a monthly income @6.12% and the minimum balance required to open this is £5000 and i haven't missed a zero there.
Further, there are several projects in the UK alone advertising 7% nett,a few are based on hotel rooms that you buy on a lease and you have a few days in a year that can also be sold. I think this forum is based on discussion of IC and we are moving away from it.
Realistically, property would be worth entering in todays market condition if yields were close to 10%NETT.

[DianeLouise]

Hi again,

If you were to buy a 1-bed at around 500,000 it would include the first years maintenance, management is availble at 5% and not even necessary in year 1 as Nakheel will take care of any defects and you will be paid a year upfront.
Therefore 10% yeild is not impossible and EU buy to let mortgages are available at 5.1% with an introductory discount for the first two years reducing it 2.9.%. Is this still a bad investment?

[DianeLouise]

Hi Stumbled,

I advise you not invest in one of the UK hotel rooms promising 7% return as I did unless it is has an insurance backed guarantee. So far mine has been a total loss and have not been able to sell for 40% less than I paid for it!