Dubai Real Estate Investing: Complete Guide to Golden Visa & Buying

Hi, my name is GG Benitez. I'm a certified International property specialist and a licensed realtor connecting the lucrative real estate opportunities of Dubai and the greater UAE with global real estate investors. This is my third season of The Dubai Connect podcast, and I wanted to start things off a little differently with this season. Now that I've been doing this for a couple of years and I have a couple of seasons in, there are some common questions that come up time and time again from my viewers and listeners, as well as from the investors that I've had the pleasure of helping guide on their investment journeys throughout Dubai. Since these questions seem to come up over and over, I thought this would be a great opportunity to dedicate an episode to just answering the most commonly asked questions. If there are any other questions that I don't cover, please feel free to reach out to me or comment on my episode, and I will address some in further episodes or I'll reply back. We'll start off with something that comes up often. We all know that Dubai is reaching record-breaking levels with regards to being a top real estate market that has all eyes on it from global investors, ultra high net worth investors, and people looking to move there to invest there. With that, there's the question that comes up often: is Dubai facing a real estate bubble? The answer is no, not according to the recent findings from the UBS bubble index report that came out for 2023, which shows that Dubai is still considered a fair buy and underpriced. If we go back to actually defining what a real estate bubble is, it's when there is an inflated price that isn't justified by the actual demand, or they aren't able to achieve meeting that demand, which can help contribute to a real estate bubble. But in fact, the demand in Dubai is real demand based on population expansion and based on Dubai being a top tourist destination globally. The developers are working to help meet that demand. This is not a hyperinflated demand that is not going to be met. Dubai really does operate like a business. In fact, on one of my previous episodes I did with an attorney, Michael Kora, he called Dubai "Dubai Inc." I also have an episode with the Dubai Land Department's Dr. Mahmud Al Qemzi, senior adviser, and I'm proud to be the only American who has had him on my podcast. We talk about how Dubai developers work with the Dubai Land Department to ensure that there's a constant healthy balance of demand and supply, where investors are going to be able to capitalize on that opportunity for the demand, but also so that it's not so unaffordable for its residents. I will link the study reports from UBS. Now, talking about the high demand in Dubai, another question that I'm asked is, what are the key drivers for demand in Dubai? We'll address a few of those right now, but I will probably go into further detail on some of these topics in later, longer form videos. If you just look at the financial reports, Dubai has a very stable economy and it's growing. GDP numbers are very strong. Then you have the population expansion. Dubai hit 3.5 million residents at the end of 2023, and they're anticipating to double that population of residents. Clearly, that's a key driver. Dubai has been ranked as a top tourist destination three years in a row by TripAdvisor, and that is another key driver, for example, for short-term rentals. There are constant government initiatives in place, such as the Quality of Life initiative, which continues to attract people to come and move to Dubai, to set up businesses in Dubai, to live in Dubai. It's not just a transient place, but they're really catering to the long-term growth of the city and its residents. The safety of investing in Dubai is another key driver of demand. With the Dubai Land Department and the Real Estate Regulatory Agency overseeing all real estate transactions in Dubai, that really encourages global investors to come and have a piece of what's happening there. Of course, affordable pricing is another driver. If we compare the price per square foot in Dubai to other major markets, especially here in the US, comparing it to New York, San Francisco, San Diego where I live, and Los Angeles, as well as other top world markets around the world, Dubai is still considerably less expensive. For those that want to build their wealth through real estate, Dubai offers that opportunity. There's a misconception that you have to be just an ultra high net worth individual to invest in Dubai, but that's not true. In fact, prices per square foot could get you in for as little as a couple hundred dollars, and with the attractive payment plans that are zero percent installment payments during construction and preconstruction, it really allows people to get in on building wealth through real estate. Of course, I can't not mention the favorable tax environment of Dubai as being another key driver. We can't necessarily say anymore that Dubai is completely tax-free because they've recently incorporated corporate tax, which is still quite competitive on an international comparison level. But with regards to investments for real estate, there are no capital appreciation taxes, no capital gains taxes, no property taxes for people that live in Dubai, and no income taxes. That's a key driver for the demand in Dubai. The strategic location is another key driver. Dubai is actually located closer to the rest of the world than we are here in the United States. With Dubai airport being a major hub and the Al Maktoum airport that recently was announced as going to be the largest international airport in the world, that strategic location is another key driver for demand in Dubai. Dubai's lifestyle caters to all different demographics. Whether you're young and single and just want to go and take advantage of the incredible job opportunities and money-making opportunities, or you're a family that wants to raise your children in a very safe and multicultural harmonious area, or you're someone like myself who wants to start a business on an international level and mix with people from all over the world, Dubai's lifestyle really caters to all different types of people. Of course, there's the high ROI in Dubai. The projections show right now that you can expect about ten percent a year in capital gains and capital appreciation. Let's say if the average construction is three years for an off-plan project, you're looking at about thirty percent capital appreciation upon handover. Then there are long-term rental returns, and you can fact-check me on Property Finder because Dubai is a very transparent real estate market. Long-term rental returns are about seven to nine percent, and short-term rental returns are twelve to fifteen percent. There's such an ease of doing business and investing in Dubai. Everything can be done online from wherever you are in the world. There are even apps being introduced, such as the RERA app, where you can track in real time the progress of your off-plan construction property, and you can purchase your entire property online. It really does help to have such ease of doing business. Property management is another very easy business model in Dubai that you can have done from wherever you are in the world because everything is online for you. Another question that I'm often asked is, can I secure financing as a foreigner? Yes, absolutely. In Dubai, you can secure up to sixty percent financing as a foreigner. The rates are actually quite competitive and as they stand right now they are less than in the United States and in Canada. You can reach out to me and my team, and we can help direct you to some of the most reputable mortgage lenders in Dubai. Another hot topic is, how can I qualify for a Golden Visa? Well, the Golden Visa in Dubai continues to be more and more attractive and helps to really attract a diverse talent pool from around the world. There are various ways to secure a Golden Visa that you can check out on one of my previous episodes, but just touching upon how to secure a Golden Visa through real estate investments, currently it's a two million dirham minimum investment. There's no longer a period where you have to have your minimum payment made before you can start to secure the visa. Now, as soon as you purchase that two million dirham, even if it's an off-plan, you are on your way to securing that Golden Visa for ten years. You get to sponsor your spouse, your children, and unmarried children as well as your parents. Here's another question that I actually covered in another episode that I just did with one of my favorite sales directors herself from Dubai. Why should I work with a broker versus directly with the developer? Well, I'm a little biased being that I am a certified International property specialist and a licensed realtor that is working with all developers in Dubai and the UAE. When a client comes to a real estate agent, or they call them brokers in Dubai, here obviously in California, you're not a broker unless you have a specific license for that. I'm a licensed realtor, so I am not a broker in the United States, although that's what I would be defined as in Dubai. The reason why you would want to work with someone such as myself is because we are not going to be biased towards just one developer. We get paid the same from all the developers, and we all have access to all the developers. We have better relationships with certain ones than others, but the truth is that working with someone like me, I'm not looking at just pushing something to you. I'm looking at helping you strategize long-term. That means, what are your goals? What are you looking for? Are you looking for moving there? So we want to look at a certain neighborhood that caters to your lifestyle. Are you looking for flipping, which would be the capital appreciation within three years? Are you looking for gathering rental properties? Is short-term rental something that you are interested in? Are you looking at the more secure and stable long-term rentals? And then, what is your budget and timeline? Based on that, we're going to cater and tailor the opportunities for you and the choices from various developers. I'm very cautious about which developers I promote based on my work with the Dubai Land Department and in Dubai, working with my partner, for example, who has eighteen years doing real estate in Dubai, to understand who to trust with regards to maximizing your ROI as an investor. That's just one aspect of it, but it's also about that long-term strategy and post-sale service that I or other agents are going to help you with. We help with property management, with timing the sale of your property, and helping you resell your property, because that's a whole other animal, and help you really make the most strategic decisions for your portfolio. In addition, even during the sale itself, we help you track down your SPA, your UDD, and other documents that are important for you. We help connect you with international tax attorneys, with mortgage lenders, with financial consultants to set up your Golden Visa, and so on. All of this is going to come from working with someone such as myself. I will take it a step further. It's not just about working with any broker, but I firmly believe that I am filling a place in the market as a certified International property specialist that has secured additional education, so that I really understand the intricacies of doing international real estate investing. Another question, and actually maybe even a concern I will say from some here in the US, is how can I keep track of my investment from all the way across the world? Dubai is constantly innovating and constantly streamlining the purchase process and the entire post-sales process for investors. The recently launched RERA app, which you can find on the Dubai Land Department government's website, allows you to track in real time the progress of your off-plan preconstruction development, as well as property management. It's all done online, even with the short-term rentals, so that you can keep track of what's happening without having to get on a plane and worry about going out there to handle it yourself. There are regulations in place to protect you as a global real estate investor, and in fact, that is a huge part of the real estate investment market in Dubai. I believe the figures were as much as seventy-six percent of real estate investors are globally based, so this is the business model that Dubai is built on. Another question that I'm asked is, how do payment plans work in Dubai? Well, when you purchase an off-plan, which is another way of saying preconstruction property in Dubai, typically you're looking at putting down about twenty percent as your deposit, and then a one-time four percent Dubai Land Department fee. Then you will be on a zero percent interest rate in installment payment plan with the developer through an escrow account that is managed by the Dubai Land Department over the period of construction of your project, which is typically three to five years. You can expect during that construction period to make probably about twenty percent of year payments, and then right before handover at the end of that construction period of three to five years, that's when you would have to come in with that final payment, whether it's you're securing it through financing or paying outright for the property. Along the same line, I'm asked, what happens if I can't make that final payment upon handover? Well, this is how a lot of people have made a lot of money in Dubai. You have the opportunity to flip the product. In Dubai, unlike most cities around the world, once you've met a certain threshold, and that is in your SPA, your sales purchase agreement, and it varies developer to developer, but let's just say it's about forty percent, once you've paid forty percent, you are legally allowed to sell that property and cash out on the capital appreciation at that time. Right before handover, you can sell it, and that actually has been historically the sweet spot of when people have flipped their property and made their maximum amount of capital appreciation or the max amount at that point. The other choice is of course you can secure financing, as we just discussed. You can secure financing for up to sixty percent as a foreign investor in Dubai, and that can help you make that final payment. How do I handle property management? The property management model in Dubai is probably one of the simplest ones to manage as an investor because it is such a well-serviced, well-oiled system. There are very reputable brands and companies that are doing the marketing. Whether you're dealing with short-term rentals like Airbnb and Vrbo, they do the marketing to the Europeans or whoever is vacationing, whatever group at that point is touring Dubai, or the long-term property management. I actually have an entire episode with Property Manager, and they can walk you through the steps of property management in that episode. But it's probably one of the simplest models and the easiest, most efficient, and easiest done online. So it's not something that should be a concern. I'm often asked what I think of certain developers, and the truth is not all developers are made equally. Yes, in Dubai, fraud is not going to happen because you have precautions in place through the regulations and restrictions by the Dubai Land Department. They have regulations and parameters in place to ensure you cannot be defrauded by a developer. However, that does not mean that you're going to have max ROI with whatever developer you choose to invest in. You should work with a real estate agent or certified International property specialist that has experience in the Dubai market to help you make the best strategic decisions about which developers have the best reputation, depending on what your goals are. For example, if flipping and resale is your goal, we have to make sure that that's a brand that does really well in the resale market. If rental is your goal, we have to make sure that that's a really good brand for that. Quality customer service, innovation, delivering on time, these are all important factors to consider when thinking about which developer to work with. That's another reason why you want to work with an agent versus directly with a developer, so you get that neutral third-party advice. A question that is asked quite often is, do I have to have a sponsor to buy property in Dubai? The answer is no. Dubai has set up freehold areas where you own the property outright. Thank you for watching my episode or listening if you're listening on Spotify or Apple. I hope that I've been able to help address some of the most common questions that you may have about investing in Dubai. I highly encourage you to comment, like, subscribe, and follow me, and engage with me, as it is clearly my passion to help guide global real estate investors on their journey of building their portfolio in the city of the future, Dubai. With that, I'll say thank you and tune in for the next episode. Bye.