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Originally Posted by ameerj
Hello Guys
I am planning to buy a property in Dubai up to 500k, I am wondering if you guys( residents of IC) recommand IC, My job is in Knowledge village and i need to use the hous for my self,
Thanks in advanced.
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I think the answer to your question is to ask one self why one needs to invest in a property and what they expect of it.
If it is yield then you need to take into account maintenance which is @10.5/sqft,agents fee which ranges from 5-10%, wear and tear of furniture, the fact that the gross yield for a 500k property is 10%(50k dhs) and once you minus these expenses the nett yield is about 6-7%, this is before taking into costs of travelling to and fro, agents fee ,completion costs and void periods.
If you don't live in Dubai you have to pay tax on your return earned in Dubai, so if you for example live in the UK that would be 20%. If it is borrowed money then you need to pay a mortgage which is about 7-9%, unless you have had a discounted rate. The interest ofcourse can be offset against your rent in your tax return.
In current market where IC projects are being completed they demand a premium, hence it is highly unlikely they will appreciate in capital for a while or substantially as they have already done so, more chances of it going down as the rentals don't cover the mortgage cost or due to over flooding of properties in the market and less people to rent.
With cash being the king and interest rates on the up in todays market earning from 6.4%in an offshore UK bank TO 8-9% on New Zealand dollar,i would put the cash in the bank and take a break from this property balloon.
These are just the basics , but i second kingpins suggestion that this forum has a wealth of information and I suggest you take your time and read them.
good luck!!