The Dean

Mods, please move this thread to the "Astonishing and Surprising News" forum........

http://www.arabianbusiness.com/dubai...ed-367414.html

Ethos83

I can still get 12% yield on rental properties? Whoa, baby, sign me up! Where do I buy?

Millhouse

The article says, buyers can expect a 12% yield.

I would 'expect' a 12% yield on property in Dubai. Sadly I suspect it is somewhat lower once management fees and outs are taken into account. Then we have asset depreciation...

Ethos83

Since I have a boring day at the office with only three employee reviews to conduct (ugh, a waste of time), I took the liberty of doing a quick search for properties for sale in the Greens and comparing with current rental prices.

Pretty much everything is renting at 8% of the asking prices of similar properties for sale. This is an established, popular community with fairly quick turnover in tenants (assuming rents are priced reasonably).

Hmm. Not bad. Even with the management fees you are probably still looking at 5-6% annual return.

The caveat is that prices are still declining, both for rent and for sale. Increasing glut will tamper the returns. You're now more likely to have an apartment sit empty for a month or two before finding a tenant even in key locations.

Millhouse

That is a 6% gross yield - depending on the cost of the mortgage (and the leverage) your yield could be higher. Still, investing in property here is still a crap deal.

Norm_uk

And that's exactly why I don't recommend buy property as an investment 50% of the time...it usually won't even keep up with inflation.

N.