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Dubai is a hotbed for real estate investors looking to invest in different kinds of properties in this ever-growing city. According to research by Gulf News, the number of investments in vacation rental properties has grown from ten thousand to twenty-five within a year.
This shows that investors are taking an active interest in vacation rental properties and expanding their portfolios. Statista shows that by 2027, the projected market volume of the US alone will reach one hundred and eight billion dollars. Therefore, with a growing demand for real estate in Dubai, one can imagine the ROI on vacation rental properties.
Step-By-Step Guide for Investing in Vacation Rentals
The following steps are extremely helpful for aspiring investors looking to buy vacation rental properties in Dubai.
Step 1) Make a Plan
There are a ton of different types of rental properties. There are single-family homes, small multi-family homes, large multi-family homes, commercial properties, vacation rental properties, and so on. So if you have chosen vacation rental property, read up more about them.
You can contact other investors with similar properties in their portfolios. Get an idea about what to expect from a vacation rental property. Compare properties in different vacation locations, study the sector, and understand the pros and cons of investing in a rental property. Then churn out a plan.
Step 2) Choose Your Market (Do Your Homework)
People tend to focus on buying properties they can reach in an hour’s drive. Instead, it is better to invest in a property where the numbers make sense, aka the rental property is profitable. Go by the plan you made in the previous step.
For instance, if you live in Deira, you can invest in a vacation rental property in Dubai Marina. It is a tourist attraction, and most people coming to Dubai choose such places for their stay. Thus, to locate your market, find out where people like to live, where the property prices and rent are higher, what about the crime rate in that area, etc.
You can talk to the locals, agents, vendors, property managers, and other local investors during your research. These people can help you with enormous information and perspective that will help you move forward in the right direction.
Step 3) Build Your Real Estate Team
Create your real estate team before you spend a massive amount of your hard-earned money on a vacation rental property. Pick professionals who are excellent in their field and trust them to make the best investment decisions. Your team will primarily consist of four main people.
First is your real estate agent, who will help you find the market and various deals. The second one is the lender, who will provide you with the best financing option. Thirdly, your property manager can advise you on the best neighborhoods, rental rates, and property conditions.
Lastly, a contractor because if you plan to buy something that needs work, which by the way, most of the best deals do, you will need a contractor. You can get these core four people through recommendations. Reach our other real estate investors online and build connections with them.
Step 4) Sort Your Financing
There are so many different ways to finance deals. There are conventional loans, portfolio loans, commercial loans, personal loans, bird investing, and taking joint loans. The key is understanding everything about these financing options and finding the best fit for a financing strategy.
Step 5) Start Getting Leads
In this step, you must ask people to give you leads. Don’t hesitate to ask for leads, whether it is your real estate agent or a fellow investor. Buying and selling are hard in the real estate market, and that too for a niche one like vacation rental properties. Getting leads will give you access to clients on the other side of the deal.
Step 6) Start Analyzing Deals
After you have started getting enough deals, it’s time to analyze. According to Brandon Turner, author of “The Book on Rental Property Investing,” math overcomes fear. The more comfortable you are running with numbers, the more confident you will pursue deals. Here’s a great thing about real estate. Every property out there has a number that makes it a good deal.
Your job as an investor is to find that number and pursue it. If your goal is AED 200 a month in cash flow, figure out how much you can pay for a property. You might be tempted to look at en number of properties, but Brandon assures us that this sector is a number game.
Step 7) Offer and Negotiate
Now it’s time for the climax, so make your offer. Include how much you want to pay, when you want to close, what kind of inspection period, and what kind of finance you want. Furthermore, you can give options like paying AED 1,256 or AED 1,500 along with the furnishings.
Most sellers don’t need the furniture and other stuff from the house they are selling off. So they are more than happy to get some money in return for their old furniture. Brandon is trying to make the point that if you give people multiple options, they are more likely to choose between them rather than a yes or no.
Once you get that, you can negotiate with the seller back and forth. And if you can’t come to an agreement, you go separate ways, or you will get mutual acceptance on the contract. After which, you can move on to the final step.
Step 8) Close the Deal
You’ll likely use an excellent legal company to do the paperwork, but you probably want to hire an inspector to check important documents. These include the property’s bonds, licenses, and life insurance. After signing all the documents and getting the keys, you will become the new vacation rental property owner.
Buy Vacation Rental Properties Through Top Luxury Property Navigating real estate is time-consuming, especially if you want to invest in vacation rental properties. You must research, find your market, negotiate for the best, and so on. Make your investment foolproof by booking through Top Luxury Property. They have various property listings across Dubai, from townhouses, luxury villas to apartments and penthouses.
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