Investing Guide
What Should My Exit Strategy Be Before Buying Property in Dubai?
Your exit strategy should be decided before you buy. Determine whether the goal is rental income, capital appreciation, personal use or eventual resale, because that should influence the developer, location, unit type, payment plan and likely future buyer. I want to know how we may eventually get out before we decide how to get in.
Decide the outcome first, because it changes what you should buy. Capital appreciation, rental income, personal use and a resale before handover each point toward a different unit, a different building and a different payment plan.
If you intend to sell before completion, the resale terms in the SPA govern whether you can, most developers require a minimum percentage paid before assignment, and that threshold sets your earliest exit.
If income is the goal, the priorities shift to tenant demand, service charges and the handover date, since an unfinished building earns nothing while you keep paying instalments.
If the property may become a residence, proximity to schools, work and community matters more than the yield on a spreadsheet. Buying without deciding this is how investors end up with a property that performs adequately at everything and well at nothing.
Why this matters
Investors often spend more time planning how to buy a property than thinking about who may eventually rent it or buy it from them.
In Dubai, the exit can influence the investment from day one. For an off-plan property, the SPA may contain conditions governing assignment or resale before handover. For any property, the location, developer, unit type, future supply and intended buyer or tenant can affect future liquidity and demand.
The property that works for long-term rental income may not be the property you would choose for personal use or a future resale strategy.
The property has to fit the goal.
What investors should verify
- Investment objective: Decide whether the primary goal is long-term rental income, short-term rental income, capital appreciation, personal use, Golden Visa qualification where applicable, eventual resale, or a combination of objectives.
- Likely future buyer or tenant: Identify who is realistically expected to want this property later, whether it be an end user, family, executive, tourist, international investor or another buyer profile.
- Developer and project: Consider whether the developer and completed project are likely to have strong recognition and demand in the future resale and rental market.
- Competing supply: Review what comparable properties are expected to be delivered in the same submarket during your anticipated holding period.
- Off-plan resale terms: If buying off-plan, review the SPA provisions governing assignment/resale before handover. Requirements can vary by developer and project, including payment thresholds, approvals and applicable fees.
- Timing: Consider whether your intended exit coincides with construction, handover, community maturity or other significant changes in the surrounding area.
- Financing and buyer pool: Consider whether the completed property is likely to be accessible to financed buyers, where applicable, because the future buyer pool can affect the resale strategy.
- Costs of exit: Understand the transaction-specific costs, approvals, outstanding developer obligations, mortgage settlement if applicable, brokerage and other expenses that could affect net proceeds when the property is sold.
- Plan B: Ask whether you would still be comfortable holding and renting the property if the resale market is not attractive at the time you originally planned to exit.
GG’s perspective
I build every recommendation around the client’s objective and the eventual exit. Before I recommend a property, I want to know who may rent it, who may eventually buy it and whether the investor would be comfortable holding it if the market does not give us the exit we expected. “Can I sell?” and “Should I sell?” are two different questions. The exit starts before the purchase.
Primary sources
- 1Dubai real estate laws and regulations · Dubai Land Department
- 2Dubai real estate transaction data (open data) · Dubai Land Department
- 3DLD e-services (title deeds, escrow, project registration) · Dubai Land Department
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