Quote:
Originally Posted by david-giorgi
Hello kk1974
Should people alway be on the lookout for developers that offer 20/80, 30/70 as you say or is that standard practice
What about the high end of the market?
|
That kind of ratio maximises you profits with no need for mortgage.
For example, you bought a flat for 100k, paid in cash. In a year's time you sell it for 110k. You made 10% ROI, 10k.
If you buy the same flat for 100k but pay only 20% down, and then sell just before the handover for 110k (very reasonable because of end users), you still made 10k but that's now 50% ROI.
So instead of one flat you can buy five with 100k cash, and make 10k on each of them.
So your profit is 50k instead of 10k.
Another advantage is that you know that you dont have to worry about upcoming payments and you can be confident that you can sell the flat before the handover - that's the time when all the end users start buying provided you have priced it appropriately.
Im have't been tuned in with Dubai market over last few months, but considering that the prices have been driven by speculators rather than end-users, the correction (in best case scenario) of the market is inevitable, and you should be very careful with your money.
Personally, if I was to invest in Dubai today I would be exploring buy-to-let properties that already have rental history and where the rental income can cover your mortgage payments while still leaving you with some extra cash.
That is much safer investment in current economic climate, and unless something changed over last few months, local banks will readily give you mortgage on properties like that, much much easier than on off plans.
Re high end properties - hard to say. According to some stats on current supply that I have seen, there are much more high end properties in the pipeline than middle or lower end, and the risk of over supply is higher. I would very careful with that.
Hope this helps.