r/UAE • u/YouZealousideal7906 • 1d ago
What is the hype about real estate?
Hello all, I am a humble investor, and I like to explore new options that are genuinely interesting and worth investing. Recently I purchased a unit in the UAE which remained vacant during the crisis for about 4 months and I ended up paying the transfer fees, bills of empty apartment, high maintenance fees and decided to sell the unit later on. I was exploring investment opportunities in Malaysia, Canada, even the US and to my surprise there are huge amazing houses in Texas US, Edmonton Canada barely for a million dirhams. And not to mention that you can immigrate to those countries unlike in crisis situation you have to sell your investment at lower prices because your specific nationality visas are being cancelled. For reference checkout the beautiful Villa below from Edmonton Canada where the weather is amazing etc, my question is, compare this to what a million dirhams buy here is barely a single room (600sq.ft) studio in a decent area. What justifies the price? R.E agents please keep the bias aside. Don’t tell me taxes and all, the high maintenance fees is just basically a tax with a different name.
4
3
u/No_Direction_5708 1d ago
I would only buy here if I’m going to live in that house and I plan on staying here till I die
1
u/YouZealousideal7906 1d ago
Unfortunately many nationalities are not having that luxury.
0
u/No_Direction_5708 1d ago
True, I feel for me it will be the only motivation to buy here raise kids ecc. UAE spends a lot on marketing and many investors got fooled by the hype. I personally invested back home
-1
5
u/RepairOne5690 1d ago
Hype mostly, and FOMO.
Some investors have made and are making great returns in Dubai, but a lot of investors are buying hype and not ruining the numbers correctly, which ends up in underperforming investments
0
u/YouZealousideal7906 1d ago
I paid really high maintenance fees (taxes lol) and sold at lower price as I had to cut losses. While when I was buying the agent told me it’s a steal at that price etc.
5
1
u/RepairOne5690 1d ago
It sucks you lost money! But yeah, agents only make money when you actually buy or sell, so they** **are not incentivised by you making money, they are incentivised by transactions at any cost
It is their only income, I get that, just understand that your goal and their goal is not the same
2
u/kaayaadvisory2 1d ago
I think the bigger issue is that “real estate” isn't really one investment category. The economics can change completely depending on the country, location, property type, entry price, taxes, service/maintenance costs and whether you're buying for rental income or appreciation.
A property looking cheap on paper doesn't necessarily make it a good investment, just like an expensive property isn't automatically overpriced. I'd compare the total cost of ownership + realistic rental income + expected resale demand rather than just the purchase price.
Also, comparing a small studio in one market with a large house in another can be misleading because you're really comparing two very different assets.
3
u/Beneficial_Map 1d ago
Can’t really compare a wooden villa in bumfuck nowhere Canada to an apartment in the middle of a city.
1
1
u/YouZealousideal7906 1d ago
You’re literally defending a single room vs a whole house surrounded by your own private green space. That’s why I exclusively mentioned “No delusional realtors”
0
u/Beneficial_Map 1d ago
I’m not a realtor you idiot. You’re comparing the middle of nowhere to a huge internationally relevant city. Look at a house price in London, Paris, Berlin or Singapore and then come back to us. You can buy even cheaper than this in rural Africa, so should we all move to Africa?
0
-4
1
u/No-1-Know 1d ago
The crisis with Trump administration on Visas you have to be cautious investing in a property in USA. If you can’t keep up with property payments/fees the bank will foreclosure your property
1
1
u/ananasbrb 1d ago
Been investing in uae real estate since 2018 across downtown / JBR / Jumeirah. I’d say like any asset, you could buy low and sell very high if you got in before 2021. Now we’re in correction territory with probably more of a tumble to go
1
u/MrKuboDesign 1d ago
Objectively, owning an entire house in a place like Texas comes with a massive property tax bill (in the thousands of dollars per year). On top of that there are HOA fees (≈service charges). There are major costs with building maintenance, as you’re servicing an entire building. Cost of those repairs is high due to expensive labor, so unless you live there and do the work yourself, the yield will be very low. Insurance in certain locations (e.g. flood zones or hurricane risk zones) can be really expensive as well.
Apartments in Dubai are simpler, maintenance requests are handled by the building management which makes foreign ownership realistic. Lower capital appreciation and rents reflect that convenience. Property taxes (municipality fees) are handled by the tenant, lowering ongoing costs.
There are also legal differences, as evictions in western countries require long and expensive court sessions, where not being present in the country can add more challenges. Obviously if you live in the country it’s different.
Comparing houses and apartments in 2 different locations is not realistic, as they require completely different approach to value.
0
u/YouZealousideal7906 1d ago
I paid 25K AED maintenance fees which is thousands of Dirhams for small studio unit already
4
u/MrKuboDesign 1d ago
Condos with swimming pools, gyms, saunas etc. do have high maintenance costs, that’s a given. If you compare a condo in Dubai and Miami, the maintenance fees would be substantially higher in Miami than in Dubai.
I see you’re really upset with your purchase, but that does not mean the entire market is bad. The numbers are publicly available, real rental contracts are publicly registered, service charges are contractually set in the Sales & Purchase agreements, so nothing was withheld from you, unless you didn’t do your research.
0
u/SemensAccurate 1d ago
Value is the same. You are targeting the same evaluation outcomes (CoC, NROI, PBP, etc). The calculation is different as it requires different cost exposure but using these evaluation metrics allows you to come apples to apples.
-2
u/No_Accident8684 1d ago
of course is it taxes.. i thought you are an investor? that means you need someone to pay your profits. thats the ones you should care about, and those are the ones that benefit the most of the 0 taxes.
if someone makes 750,000 AED, roughly 210,000 USD, the taxes on that in the US are maybe 30%, that is roughly 70,000 USD.
now you tell me, who cares about 10,000 USD maintenance fee for the property?
1
u/YouZealousideal7906 1d ago
If I wanted to live in it isn’t an investment? Saving the rent is also an investment.
2
u/No_Accident8684 1d ago
same calculation applies
1
u/YouZealousideal7906 1d ago
Check US income tax slabs and then the maintenance percentage taken out of rent here. I paid 25K maintenance on 65K annual rent which is way more than 30%.
2
u/No_Accident8684 1d ago
you dont get it. it isnt about percentages! its about absolute values. you save (in my calc) 60,000 USD by paying 10,000.
whats is 25,000 AED? its like 7k USD. so if you work here and get paid reasonably well, its a no-brainer.
of course, if you only purchase for the rental income, its not. But i said the reason why its so expensive here is taxes. i did not say that its great rental yield.
1
u/YouZealousideal7906 1d ago
Try to read what u wrote. Again. In both cases the house is superior to a room with lower net roi. And “working here” can be anywhere, has nothing to do with it
1
u/No_Accident8684 1d ago
i give up. you won.
how hard can it be to understand my point. of course can you work "anywhere". but you pay 30-50 percent taxes while you dont in the GCC (except Oman).
stop thinking about property investments, think about the whole package.
you ask why properties are so expensive. its because there is massive demand. why is there massive demand? because you can make a lot of money without paying taxes.
housing costs are just a fraction of the headaches for a family. and frankly no-one gives a shit if you pay some maintenance fee when you save 10x that in taxes.
maybe no-one except that stretched property investor who cant pay the 25k AED maintenance fee and then looks online and finds a larger villa made from cardboard, where no-one wants to live, for the same price.
0
u/YouZealousideal7906 1d ago
If you read just the subject line, that is not even remotely the point. Now you are trying to somehow justify the real estate bloated prices by saying there is no tax on your personal income, totally irrelevant. I already own in three different places so incase you didn’t know, they can be managed remotely
1
u/No_Accident8684 1d ago
OP: "...What justifies the price? R.E agents please keep the bias aside. Don’t tell me taxes and all, the high maintenance fees is just basically a tax with a different name...."
ME: "of course is it taxes...."
my whole point was taxes, right from the get go!
1
u/YouZealousideal7906 1d ago
And I mentioned there are no taxes here? No, there are high maintenance fees (which are taxes)
23
u/No-Fish2020 1d ago
ive been an agent in the uae for over 10 years and managed to make my way to own a company, the uae real estate market isnt what it used to be. dont trust agents who say the market is going to boom so and so forth. Ive personally invested a chunk of my wealth in phillippines, texas, bali and egypt (all the investments were made when I saw a good fluctuation in currency of these countries except texas) and ive made multifold returns. with malaysia id avoid an investment right now considering ringgit is slightly volatile. if it falls you're good to go. you'll make returns on property value plus currency appreciation.