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Rent or Own Apartment?
UK CIG has ready apartment at Ritaj in Dubai Investment Park for which they have affordable payment plans which turns out to be better that renting....and direct from developer.
http://www.ukcigreb.com/ritaj/ What are your thoughts about owning rather than renting? Is the market good for this? :confused: |
Re: Rent or Own Apartment?
Are you moving here or just trying to sell us something we don't want?
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Re: Rent or Own Apartment?
They look boring :unsure:
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Re: Rent or Own Apartment?
I would invest my money in a country where you have a few more rights just in case anything ever goes wrong!
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Re: Rent or Own Apartment?
While we have done some work as consultants for the developer of Ritaj, I think that if you take a long term view buying an apartment may be a good option.
Of course it all depends on the price, but at the bottom of the market at todays prices you can still get a reasonable rental return on Ritaj. So as an owner occupier you will save a good chunk on not paying rent. With easy access to Jebel Ali Free Zone, and Dubai WOrld Central as well as Dubai Investments Park, it has a potential when the market picks up. |
Re: Rent or Own Apartment?
Originally Posted by dylan71
(Post 8722468)
UK CIG has ready apartment at Ritaj in Dubai Investment Park for which they have affordable payment plans which turns out to be better that renting....and direct from developer.
http://www.ukcigreb.com/ritaj/ What are your thoughts about owning rather than renting? Is the market good for this? :confused: It's far from financial centre, schools, malls, golf, beaches and everything else. It's also in the flight path of DWC, one of the worlds largest cargo airports. Even when the market picks up, the above will still be true. Avoid. |
Re: Rent or Own Apartment?
There's no guarantee that the market has already bottomed out. We could still be in for prolonged period of steadily declining prices.
Ownership in DXB is expensive because in addition to the mortgage you also have to pay building service charges, which are quite high. Legally they cannot be passed along to your tenants. Plus the legality of ownership in the UAE is questionable and revokable at any time on the whims of the rulers. |
Re: Rent or Own Apartment?
Few investments can ever be guaranteed but the indications suggest that the market has bottomed out as few sellers now want to drop their prices. What I did say was for the longer term the indications were better.
For Ritaj, I expect the service charges to be lower than many other developments, but the level will be set by the unit owners in General Assembly Laws in any country can be changed, but the momentum in Dubai is providing more security for property owners rather than less. |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8778219)
Few investments can ever be guaranteed but the indications suggest that the market has bottomed out as few sellers now want to drop their prices. What I did say was for the longer term the indications were better.
For Ritaj, I expect the service charges to be lower than many other developments, but the level will be set by the unit owners in General Assembly Laws in any country can be changed, but the momentum in Dubai is providing more security for property owners rather than less. And, living in Sports City, I have to say that DIP is one massive labour camp. If I were stupid enough to want to purchase an apartment in Dubai, the last place I would be looking at would be DIP... Hell, Id buy in International Shitty before DIP |
Re: Rent or Own Apartment?
And there are few people buying....
Originally Posted by Tim Crowe
(Post 8778219)
Few investments can ever be guaranteed but the indications suggest that the market has bottomed out as few sellers now want to drop their prices. What I did say was for the longer term the indications were better.
For Ritaj, I expect the service charges to be lower than many other developments, but the level will be set by the unit owners in General Assembly Laws in any country can be changed, but the momentum in Dubai is providing more security for property owners rather than less. |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8778219)
Few investments can ever be guaranteed but the indications suggest that the market has bottomed out as few sellers now want to drop their prices.
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Re: Rent or Own Apartment?
Originally Posted by typical
(Post 8778431)
The market will not bottom out when sellers no longer want to drop their prices, but when all those that have to drop their prices have done so.
To achieve growth – Dubai needs influx of residents, investors, and regional money. To attract this investment – Dubai needs better regulation of condo maintenance/corporations... More liquidity, more flexible lending terms... Better handling of debt (bankruptcy)... Better sponsorship regime... Once a few of those factors come into play, we'll see a slow recovery to realistic (2004) prices, and perhaps better in more desirable areas like Downtown and nicer Marina units. Dubai has a great future ahead of it. Later. |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8778219)
Few investments can ever be guaranteed but the indications suggest that the market has bottomed out as few sellers now want to drop their prices. What I did say was for the longer term the indications were better.
For Ritaj, I expect the service charges to be lower than many other developments, but the level will be set by the unit owners in General Assembly Laws in any country can be changed, but the momentum in Dubai is providing more security for property owners rather than less. |
Re: Rent or Own Apartment?
Originally Posted by BurpusMe
(Post 8778522)
The market will indeed hit a low, and likely stagnate for years before growing.
To achieve growth – Dubai needs influx of residents, investors, and regional money. To attract this investment – Dubai needs better regulation of condo maintenance/corporations... More liquidity, more flexible lending terms... Better handling of debt (bankruptcy)... Better sponsorship regime... Once a few of those factors come into play, we'll see a slow recovery to realistic (2004) prices, and perhaps better in more desirable areas like Downtown and nicer Marina units. Dubai has a great future ahead of it. Later. Influx of residents -yes evidenced by the growth of the school sector as well as government statistics better regulation of condo maintenance/corporations... yes see laws on Owners Associaiton management that give the powers to manage their developments to unit owners and define information that must be provided to buyers More liquidity - banks have started lending for home mortgages again. In 1998 we had prophecies of doom when the real estate market bubble popped, yet within a couple of years it was booming again. There will not be the boom of 2005-8, but it is not unreasonable to expect decent returns in 3-5 years |
Re: Rent or Own Apartment?
Influx of residents -yes evidenced by the 'growth of the school sector' as well as 'government statistics'
Lord. The expat population of DXB has shrunk. It would be foolish to argue otherwise. Talking about growth of school sector doesn't mean squat when much of the leaving expat population is being replaced by local kids whose parents are opting out of the very mediocre state school sector. 'government statistics' - Does anyone here actually believe a word that is said by the Dubai municipality and even the UAE government? This is a place that refuses to acknowledge bad news. During the entire real estate collapse prominent Dubai and UAE officials were publically saying rents would never go down, things were fantastic, companies were still hiring - whilst the reality was quite the opposite. It is rare for things to dramatically change overnight - the dust takes time to settle. We're now beginning to see the full effect of the late 2008-09 collapse - a year later. People are still leaving Dubai. Companies are still laying off people. The city is still in massive debt.
Originally Posted by Tim Crowe
(Post 8779855)
While I do not want to exagerate the growth prospects, many of the conditions mentioned by Burpus are here;
Influx of residents -yes evidenced by the growth of the school sector as well as government statistics better regulation of condo maintenance/corporations... yes see laws on Owners Associaiton management that give the powers to manage their developments to unit owners and define information that must be provided to buyers More liquidity - banks have started lending for home mortgages again. In 1998 we had prophecies of doom when the real estate market bubble popped, yet within a couple of years it was booming again. There will not be the boom of 2005-8, but it is not unreasonable to expect decent returns in 3-5 years |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8779855)
While I do not want to exagerate the growth prospects, many of the conditions mentioned by Burpus are here;
Influx of residents -yes evidenced by the growth of the school sector as well as government statistics better regulation of condo maintenance/corporations... yes see laws on Owners Associaiton management that give the powers to manage their developments to unit owners and define information that must be provided to buyers More liquidity - banks have started lending for home mortgages again. In 1998 we had prophecies of doom when the real estate market bubble popped, yet within a couple of years it was booming again. There will not be the boom of 2005-8, but it is not unreasonable to expect decent returns in 3-5 years |
Re: Rent or Own Apartment?
Originally Posted by Bahtatboy
(Post 8779918)
Not wishing to be overly sceptical, but this really does smack of Dylan tossing this up in the air for you to wallop.
That was a one-shot deal and it's over. Currently there are thousands of empty flats across the city. Only the finest locations are attracting tenants... I think those areas could potentially see positive movement in the next decade. Maybe in 5-10 years? Those random desert apartment blocks however are doomed to return to the sand whence they came. The best case for them is labor accoms. |
Re: Rent or Own Apartment?
Burpusme - Not strictly true
Many of the finest developments lack sufficient tenants. We have found that well-managed, well priced, cheaper units in desert areas are renting well. Our Tenants are trading up to better properties at the same price or trading down because their budget is less or are moving from Sharjah because they can now afford it and they are not the frequent power cuts. Depending on your property, the market is not all doom and gloom |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8780164)
Burpusme - Not strictly true
Many of the finest developments lack sufficient tenants. We have found that well-managed, well priced, cheaper units in desert areas are renting well. Our Tenants are trading up to better properties at the same price or trading down because their budget is less or are moving from Sharjah because they can now afford it and they are not the frequent power cuts. Depending on your property, the market is not all doom and gloom |
Re: Rent or Own Apartment?
Low rent housing may not be an exciting investment but can offer you consistent and reasonable yields. Eg. an invesment in UK student accommodation funds consitently records 10%+ returns. In Dubai this segment can offer rental returns between 7-9%, if you are investing today, not based on valuations of 2 years ago.
You really need to understand your investment criteria to make a wise decision |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8780339)
Low rent housing may not be an exciting investment but can offer you consistent and reasonable yields. Eg. an invesment in UK student accommodation funds consitently records 10%+ returns. In Dubai this segment can offer rental returns between 7-9%, if you are investing today, not based on valuations of 2 years ago.
You really need to understand your investment criteria to make a wise decision Let's say you foolishly buy one of the 2,200 ugly Ritaj flats. A total "investment" of AED 650,000 in a 1000SQFT 2BR with a view to renting for 15 years and exit. Costs: AED 162,500 (25%) downpayment + AED 788,721.81 mortgage payments (assume a 15-year average of 7% on an AED 487,500 mortgage) + AED 375,000 maintenance fees (assuming AED 25,000 per year over 15 years) + AED 26,000 (4%) agency commission + AED 10,000 land transfer and related registration fees + AED 10,000 utilities setup + AED 5,000 mortgage application and setup costs + I won't even include insurance and refurbishments for tenant damage, which will be additional In 15 years you're shelling out approximately AED 1,377,222. Unless new fees or taxes come into the picture, in which case you'll pay more. Using Khail Gate and International City as a benchmark, the expected gross rental yield on your Ritaj 2BR is approximately AED 40,000. Perhaps lower, but let's be optimistic. Let's assume things improve, and you can increase the rent by 15% in 5 years time. Let's assume 90% occupancy rate, which is optimistic given the poor location. Years 1-5 might gross AED 180,000 Years 6-15 might gross AED 414,000 What will this flat be worth in 15 years? I feel it will depreciate, but that's debatable at this point. For the sake of consideration, let's assume it holds it's value and you sell the unit for AED 650,000 Your total income for the property would be something like AED 1,244,000. You've lost AED 130,000 over 15 years. How are you going to make that 7-9% return you mentioned? |
Re: Rent or Own Apartment?
Originally Posted by BurpusMe
(Post 8780672)
Have a look at these numbers.
Let's say you foolishly buy one of the 2,200 ugly Ritaj flats. A total "investment" of AED 650,000 in a 1000SQFT 2BR with a view to renting for 15 years and exit. Costs: AED 162,500 (25%) downpayment + AED 788,721.81 mortgage payments (assume a 15-year average of 7% on an AED 487,500 mortgage) + AED 375,000 maintenance fees (assuming AED 25,000 per year over 15 years) + AED 26,000 (4%) agency commission + AED 10,000 land transfer and related registration fees + AED 10,000 utilities setup + AED 5,000 mortgage application and setup costs + I won't even include insurance and refurbishments for tenant damage, which will be additional In 15 years you're shelling out approximately AED 1,377,222. Unless new fees or taxes come into the picture, in which case you'll pay more. Using Khail Gate and International City as a benchmark, the expected gross rental yield on your Ritaj 2BR is approximately AED 40,000. Perhaps lower, but let's be optimistic. Let's assume things improve, and you can increase the rent by 15% in 5 years time. Let's assume 90% occupancy rate, which is optimistic given the poor location. Years 1-5 might gross AED 180,000 Years 6-15 might gross AED 414,000 What will this flat be worth in 15 years? I feel it will depreciate, but that's debatable at this point. For the sake of consideration, let's assume it holds it's value and you sell the unit for AED 650,000 Your total income for the property would be something like AED 1,244,000. You've lost AED 130,000 over 15 years. How are you going to make that 7-9% return you mentioned? |
Re: Rent or Own Apartment?
Burpus me
Accountants can whatever result they want as you have. Without looking at all your figures, you have massively overestimated the service charges, and I believe understimated the rental figures too, there is no comparison with International city. i wont therefore take the time to examine the rest |
Re: Rent or Own Apartment?
Originally Posted by Tim Crowe
(Post 8785463)
Burpus me
Accountants can whatever result they want as you have. Without looking at all your figures, you have massively overestimated the service charges, and I believe understimated the rental figures too, there is no comparison with International city. i wont therefore take the time to examine the rest People paying premium rates expect convenience and amenity: shops and services, access to SZR and Dubai Metro... quality views and landscaping... proximity to beaches, parks, work (media city / financial centre), other developments and places to socialize. Ritaj lacks those amenities. Hence my comparison with International City. My figures were extremely generous, if anything. My service charge estimate is based upon assumption of build quality (it's prefab, right?) and low occupancy due to bad location and lack of awareness in the market. I base assumptions on what I see, and there's not much to see at the moment. If the developer has officially posted a lower service rate please post a link, otherwise you have a moot point. If you'd prefer to bury your head in the sand – there's LOTS of it up there in Ritaj! |
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