According to a study by real estate consulting firm Savills in 2020, Dubai offers investors attractive deals with one of the highest rental profitabilities in the world.
So, if now is the right time to invest, where do experts think landlords are most likely to achieve the best rental returns?
ABU DHABI
Al Ghadeer District
According to Crompton Partners, a large real estate company in the Emirate, Aldar's project Al Ghadeer, located on the border of Dubai and Abu Dhabi, offers the highest rental profitability in the UAE capital — 8%.
According to the broker, the rent for a one-room apartment in Al-Ghadir starts from AED 22,000 and can go up to AED 43,000 for a two-room apartment. In 2020, sales prices fell by about 8%.
Al Reef District
Al Reef, located on the outskirts of the city, offers the second-highest rental profitability at 7.5%.
According to Crompton Partners, you can rent a one-bedroom apartment in Al Reef from AED 48,000 and a three-bedroom apartment for AED 90,000, while the rent for villas in this area varies from AED 80,000 to AED 165,000.
With the pandemic spurring more residents to move to more spacious housing, Al Reef gained popularity last year and, according to the real estate company, grew by 4%.
Al Reem Island
Al Rim Island has the third highest rental profitability in Abu Dhabi with an average of 6.8%. A one-bedroom apartment on Al Rim Island can be rented from AED 50,000 to 70,000, while a premium four-bedroom apartment will have an annual rent of about AED 240,000.
Al Raha Beach and YAS Island
Al Raha Beach and Yas Island round out the top five places to rent in Abu Dhabi with rental profitabilities of 6.2% and 6%.
Al Raha Beach, an Aldar beachfront Development, recorded a 6% drop in total sales prices last year, while Yas Island apartment prices fell by 6% and villa prices increased by 12%, according to Crompton Partners.
At Al Raha Beach, owners can rent out a one-bedroom apartment from AED 65,000 or a premium four-bedroom apartment for AED 260,000. At the same time, a four-bedroom townhouse for rent will cost between AED 190,000 and 310,000.
On Yas Island, the rent for a one-bedroom apartment starts at 70,000 AED, while a three-bedroom apartment can bring in a rent of around AED 190,000. A two-bedroom villa in the community can be rented for AED 160,000, a five-bedroom villa costs between AED 240,000 and 300,000.
According to Ben Crompton, managing partner at Crompton Partners, buying a property for rent has never offered better value, and interest rates have been at an all-time low. A low interest rate means that investors can purchase a good property with more affordable money and quickly recoup it.
DUBAI
Discovery Gardens Residential Complex
Discovery Gardens offers investors the highest gross rental profitability in Dubai. According to the real estate website Property Finder, apartments on average have a profitability of more than 8% per annum in this community.
The average price for renting a two-bedroom apartment is AED 38,000 in this community. The average home sale price is AED 417,000.
International City District
Apartments in International City on average bring an income of more than 8% per annum from renting out. The average price for renting a two-bedroom apartment is AED 25,000 with an average selling price of AED 300,000. According to Property Finder, rents have increased by 6 % in the last six months in this community.
Dubai Marina Area
Apartments in Dubai Marina have the third most profitable place. Owners who rent out housing here receive an annual profit of 6%. An apartment in Dubai Marina can be rented for AED 60,000 and bought for AED 830,000. The rental housing price remained stable for 6 months in Dubai Marina.
Damac Hills Community of Villas and Townhouses
The Damac Hills community offers profitability of more than 6% per annum, while the real estate return on UNA by Nshama is more than 5% per annum.
-Ends-
© Press Release 2021
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