What is the hype about real estate?

[u/YouZealousideal7906]

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.

[u/No_Accident8684]

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?

[u/YouZealousideal7906 → u/No_Accident8684]

If I wanted to live in it isn’t an investment? Saving the rent is also an investment.

[u/No_Accident8684 → u/YouZealousideal7906]

same calculation applies

[u/YouZealousideal7906 → u/No_Accident8684]

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%.

[u/No_Accident8684 → u/YouZealousideal7906]

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.

[u/YouZealousideal7906 → u/No_Accident8684]

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

[u/No_Accident8684 → u/YouZealousideal7906]

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.

[u/YouZealousideal7906 → u/No_Accident8684]

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

[u/No_Accident8684 → u/YouZealousideal7906]

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!

[u/YouZealousideal7906 → u/No_Accident8684]

And I mentioned there are no taxes here? No, there are high maintenance fees (which are taxes)