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I have posted several pitfalls and how to go about investing and raising finances in a property market like Dubai.
If you are UK based the best option to finance the property in a place like Dubai is to remortgage or release equity from your current house. The remortgage rates are cheaper and still available for a fixed period under 6%if searched and coming down.Further, dont forget if you are going through John Charcoal it is going to be a buy-to-let mortgage and much more expensive. The key to any investment, let alone a property one has to be thoroughly researched and to my knowledge the best income so far is produced from International city yieldng close to 9% gross and once you deduct all the fees,maintanence,cost of furnishing, dropping dirham(linked with dollars) you are barely making like 7-8% nett if you enter at these levels. NO DOUBT THOSE WHO ENTERED EARLIER HAVE MADE A CAPITAL PROFIT AND THOSE WHO HAVEN'T SOLD ON ARE YIELDING ABOUT 12%-15%.
Dubai, is and will be resilient to property crash for now, only cause it is a CASH MARKET, majority of the people investing out there are cash buyers and don't need a mortgage, and they are majority from, INDIA,RUSSIA,PAKISTAN, AFRICAN CITIES AND GULF STATES, so now we know why they don't need a mortgage or don't even know the concept of it.The initial influx of investors from the UK was there ,when things were booming in the UK and properties and refinancing was cheaper. That is why it is important you raise cash cheaply to buy out there as anything raised locally will be so expensive you will have to pay the shortfall from your pockets.
MOST IMPORTANTLY, as you are from the UK YOU HAVE TO DECLARE ALL YOUR INCOME WORLD WIDE IF YOU RESIDE IN THE UK and pay taxes on the rental income or capital gains you make,however you can deduct the interest and expenses from the rental income. Also, remember to buy your property in joint names with your wife as when you sell if you are in the UK you can double your CGT(CAPITAL GAINS TAX)allowance. My last point to you is there is any room for further capital growth left?? unless you are buying something at launch and the prediction is there is going to be over supply of properties by the end of this year. I would advise all those sitting on the fence , wait a little longer, it is unfortunate that the US cut rates by 0.75% just to avoid reccession, but for how long, this is just trying to put the problem under the carpet, with oil prices falling and US just avoiding a reccession for now, the question is for how long?? And when that BURST comes the world's economies with collapse as they are creating a huge bubble by lowering inter lending bank rates.I give it 4 months,before we see the worst.GOODLUCK!!