5 major and common mistakes real estate buyers make while investing in Dubai

We at S&V properties want to make investors aware of the most major and common mistakes investors make while purchasing property in Dubai. If you are looking to invest in Dubai property, these are the things you should avoid.

Mistake Number 1 – Working with an unauthorized real estate agent.
As per the Dubai real estate law, every single real estate broker that is active in the market irrespective of the fact that they are in a designated are or not, they must be registered with the Dubai land department. This is important because if anything goes wrong with the broker, the investor can simply go to RERA and lodge your complaint

Mistake Number 2 – Buying an off-plan property that costs more than your budget
Investors may be able to pay the 5% or 10% upfront and they plan to come up with the rest of the payments as they go along. In the event that the investor cannot manage the payment, the developer will start imposing fines and penalties and when the investor has the funds to make the payment, the fines have amounted to a much larger amount

Mistake Number 3 – Buying a commercial unit like a hotel or Office as an investment
Investor often believe that commercial unit may be a better investment as far as real estate is concerned as compared to residential. Our experience leads us to believe that when external events hit us, the office space and commercial space prices take the first and hardest hit and they are the last to recover as well. Over and above this, the maintenance of commercial units is so high that the return on investment is very low

Mistake Number 4 – Not enough research
Most investors make the fatal and most damaging mistake of not doing enough research. Investors can come to Dubai and spend 48 hours to understand who the developer is, what is their background, where is their office, what is their portfolio, what work they have done and so on. Many investors go ahead without even looking at the location in person.

Mistake Number 5 – Booking deposit, security deposit & Escrow account
If you’re buying a property, you are transferring all the money to the real estate brokers or if you are buying an off-plan property you are making the payment to the developer’s account.
If you are buying a property that is ready, the buyer will write a cheque of 10% of the amount as a booking deposit and you give it to the broker and the company will hold it based on trust. This is not enough. The seller will also write a cheque of 10% of the amount with the company that you are working with as a security deposit
If you are buying an off-plan property some developers, ask you to pay the money into their account. This is not right. You will never send the money directly into their account. You will deposit the money into an Escrow account which is attached that project. This money is safe and cannot be touched until a certain level of development is complete.

For any further assistance, please click here to get in touch with us