Quote:
Originally Posted by Investoman_uae
Roshan,
Your analysis using the mortgage calculator is not valid, correct me if am wrong. The property is offplan, under contruction... so the rental aspect of the investment does not come in until its completed.
When its completed in 2009 or 2010... you will have to consider the rent at that time... no one will kno for sure, but a one bedroom should fetch in excess of 100,000 in Abu Dhabi...way in excess. Al Reem Island is Abu Dhabi's Business Bay style development. And its an island.
At the moment, the people who are buying these properties are in it to make money... flip it in few months and make some cash.... it will be difficult for the end-buyer.... if he was to rent it out though. Capital appreciation is faster than rental appreciation... this is the main problem with these developments.
Inv.
|
Inv,
I went back to the mortgage calculator and went on increasing the rent from Dhs 8,000 per month to Dhs 14,900 per month ( amounts to a rent of Dhs 178,800 per year ) until I moved from negative cash flow to a positive cash flow of Dhs 473. At the Palm you can rent a 2 BDR for that kind of money. I don't think whether now or 5 years from now, Abudhabi will enjoy a rent of Dhs 178,000 for a 1 BDR. Don't forget the other developments which will come in.
As I said Abudhabi is more of an equity market and not a rental one. Abudhabi is not trade focussed like Dubai and only enjoys wht it gets out of oil.
Chances of loosing your shirt along with pants are more
Regards
Roshan