Millennials are predicted to make up for a large proportion of home buyers. With information and technology at the forefront, GenZ will have a lucrative impact on the real estate industry. Over the years people are made to believe that investment in Real Estate is a challenging investment especially for the millennial group due to lack of resource and credibility. However, with proper guidance and opportunities, young investors have a chance at a successful investing career.
If you are a 20 something aspiring real estate investor, keep reading to learn how to break into Dubai’s real estate market.
With the world moving towards technology changes and digital resources, its safe to say that the future of real estate investments too will lie in the hands of technology. Investors will have a variety of property listing platforms, apps and VR that will impact real estate transactions. Millennials will benefit from these improvements and make these investments easy.
One of the barriers that exist in Dubai especially amongst millennial is the price point. According to a survey by HSBC, 50% of millennial seek financial support from their parents. As the real estate market continues to grow, banks are likely to offer attractive options and payment plans that will cater to the young home buyers.
Dubai offers a wide range of properties to cater to everyone’s needs. Location with good facilities and accessibility is key when looking to invest in a property. A good local gym and supermarkets with easy access to highways should be a top priority.
When buyers look to buy property in the UAE, they often consider number of beds and the location to judge its worth. However, the best way to judge the worth of the property is through the price per square foot. Your definition of expensive properties and affordable ones will change drastically.
As a young home buyer, you are more likely to have less cash to purchase a house and can sort to leveraging. Leveraging a great way to grow your real estate portfolio and maximize profits. The basics of leveraging include borrowing money from a lender to complete the purchase of the house. Understanding about the use of leverage in a real estate market is beneficial to determine how to get the highest rate of return from the money that you invest.
This is a common investor tip that works well in the real estate industry as well. The term down market is synonymous to a buyer’s market. This is where the real estate sales are sluggish and prices fall. The interest rates is low which means that selling a house during this time would get you less money as compared to when the market is booming.
According to an article by Feldman Equities, an investment time horizon, usually just referred to as “time horizon,” is the period in which an investor is willing to invest in a deal before receiving its initial capital contribution (plus profit) back. Investors usually refer to time horizons as either short, medium, or long-term in nature. A time horizon is a planning tool that allows you to determine the specific opportunities to invest. In other words, an investor should first have a grasp of their time horizon, and then select investments informed by that guideline.
A common question that is frequently asked by first time buyers is whether to earn through regular income or capital appreciation. While these are two strong investment strategies, the decision highly depends on whether you are looking for a long term opportunity or short term rentals are enough.
As a buyer you already know what to look for in terms of number of rooms, space, utilities. However, your agent will be alert for issues like roofing problems, molds, insect’s issues etc. Only an agent will be able to recognize these problems and fix them. And of course, let’s not forget an agent has superior negotiating skills to get you the best price possible. As Henry Ford rightly said, “it proves that you are smarter than they are, when you hire people who are smarter than you.”
Buying a home does not only include the sale cost, it includes all the miscellaneous costs that are associated with buying a property. In Dubai, these costs include maintenance costs, agency fees, mortgage fees, initial deposits, government fees (DLD and property registration fees) and lastly an optional but highly recommended insurance cost. Understanding all these costs will further help you strengthen your home buying decision.
During the pandemic online 3D tours have become extremely popular. These tours help shoppers virtually walk through the home and observe all the details that you would normally miss in a photo. As convenient as these have become, it does not provide you with the true essence of the house. Make sure to attend as many open houses as possible to familiarize yourself with the neighborhood, location and overall condition of the home.
It goes without saying that your real estate agent will strategize this for you. However, as a first time buyer it is advisable to learn about the market condition and different things that you can ask the seller to waive off.
To get a loan finalized it is important to understand about all the loan options and different costs that will be associated with the deal.
Most young buyers are looking for their dream homes. (a house with a pool, backyard, porch and what not..). What they don’t look for are all the maintenance costs that come with the home. Making a decision based on the looks of the house will not suffice in the long run.
Buying a home is an exciting time; it is the first time you will purchase something this big all on your own. But do keep in mind that buying a home is not the same as purchasing a car! It requires a lot of planning. Don’t feel the need to rush into any decision because the market is hot. Learn about the market, do your online research, and check out what’s there and speak to people. Don’t navigate the market alone!
Even though the real estate market is constantly changing and is not the same since your parents bought a home. It still includes a similar process. They are more likely to have a better financial opinion and can advice you on intricacy of home ownership.
Some banks will give a slightly mortgage rate if you undertake a salary transfer to them. According to an article in Gulf News, a salary transfer not only means your salary will be credited to the account you opened with your home loan but also means that your employer will give an undertaking to the bank that if you were to leave employment, any end-of-service gratuity would go to the bank where the salary transfer is being made.
Ensure when you get offers that everything is put in writing. “Don’t sign any paperwork without having read and understood it properly,” advises Keren Bobker, an independent financial advisor at Holborn Assets. “Professional advice is worth paying for as mistakes can be very costly.”
As stated in a report by HSBC, most millennial are looking to invest in off plans projects. If you are looking to invest in a property that is under construction then make sure to contact the developer every 2-3 months to track the progress.
While currently majority of the millennial are not home owners in the UAE, the HSBC report showed that 80% of UAE’s millennial intend to make property purchases in Dubai within the next 5 years. Khaleej times states that people in their 20s prefer to invest in apartments while those in their 30s consider villa communities as they take into account family planning. Investments is not a chance of luck but rather a sure shot profitable market, if you have done your research, double checking the facts being provided by the broker and always staying informed.