How to Invest in Dubai Real Estate as a Foreigner: What to Know

I am not a real estate agent. Okay, yes, I am a licensed realtor in California and I am a certified international property specialist and RERA certified. But my identity is not that of being a real estate agent. What do I mean by that? Let me just share a little bit about my background and why I started The Dubai Connect. I actually have had a very successful PR business for the past 17 years: GG Benitez's Public Relations Inc., where I represent global brands and help them share their messaging to their end user through my relationships with media and celebrities on a global level. And before that, I was in pharmaceutical sales for seven years. And before that, I was attending UCSD Revelle College and graduated with a degree in economics. My passion is not about talking about real estate per se. My passion is about connecting. And when I came to Dubai for the first time as a first generation Arab-American two and a half years ago, I saw a need in the marketplace, particularly for Americans from the United States and North Americans from Canada to participate in Dubai's real estate. But they weren't going to do so until they understood who, what, when, where, why. I took my education, I took my background in PR, I took my background in sales, I applied myself as an Arab understanding culture, and I immersed myself in Dubai to understand the process of purchasing property, why an investor would want to purchase in certain areas over others, who the big players are, and most importantly, what is the future? Because unlike other markets around the world, you cannot look at Dubai and make a strategic decision based on what you see now. But it's about understanding what the future is. And that's what I'm here to do. I'm not here to try to sell you a property and earn a commission. I'm here to connect you, help you build, and then manage your portfolio past the sale through my network of top-tier developers, financial concierges, property managers, mortgage brokers, and more, to help you make the best decisions as you build your portfolio in the city of the future: Dubai. Hence, The Dubai Connect. Welcome to season six of The Dubai Connect podcast, addressing top-asked questions by global investors in Dubai real estate. So now that I've been doing this for almost three years, there are certain questions that continuously come up by global investors. So I wanted to address those face to face. I wrote down the most important ones and I'm going to address them one by one. Feel free, of course, to reach out to me for more specific advice, but I'm going to start off with: is this a good time to buy property in Dubai? With some even asking: is it too late? Well, if you look at the numbers, and remember Dubai is a very transparent real estate market, you can easily go on to Property Finder, DXB Interact, the DLD, Dubai Land Department website. You can track the figures of what's been happening in Dubai. You will see that yes, it was better to buy it last month, last year, two years ago, three years ago. And that may lead some people to think: uh oh, it's too late. How can I make money now? I missed the time period to get into the market. The answer is it is not too late, and this is the best time to get into Dubai real estate. How do I say that? How do I stand firmly behind that? Look at Dubai's price per square foot and compare that to top markets around the world: London, New York, Vancouver, Los Angeles. You will see that Dubai is extremely competitive and affordable to get into the real estate market. Okay, now let's look at capital appreciation opportunities. Where does that come from? Obviously, with demand. We look at the number of people that have moved to Dubai and the tourists continuously breaking records. They hit 5.8 million at the end of last year. And according to the Master 2040 Plan, there are going to be more than seven million people here by the year 2040. And you look at the occupancy rates for the hotels and the resorts, constantly hitting record numbers, because Dubai continues year after year to be voted as a top tourist destination. What does this all mean? That means that you're going to get in at these lower prices per square foot and you have the opportunity for capital appreciation and rental returns. Long-term rental returns in Dubai, again compared to the top markets around the world, is significantly higher. You're going to find numbers, and this again is very transparent: between seven, eight, nine percent and above. Compare that to where I'm from and where I also sell, in California, which is maybe three percent. Let's compare that to New York. Let's compare that to London. Let's compare it to Vancouver. And you will see that the opportunity to have that rental passive income is significantly greater here in Dubai. Now let's look at short-term rentals. Short-term Airbnb opportunities in Dubai. I'm setting up offices right now, for example, in the south of Spain, where it's becoming more and more taboo and difficult to be able to capitalize on the opportunities for short-term Airbnb rentals. There are reasons for that and we understand, and there are legitimate reasons. But in Dubai, they want you to capitalize on the opportunities for short-term rental. They've made it easy for you to do so from anywhere across the world, as everything is digitized. Property management is set up so you can handle it from wherever you are in the world. Log into your computer and you can see that they're marketing the product for you for tourists and they're handling check in, check out, maintenance in between. Everything is very transparent, and now you're making double-digit rental income through short-term Airbnb. And all of this with zero property taxes and zero capital gains taxes. Now, for us Americans, of course, we're taxed on worldwide income. But here in Dubai, there are no property taxes, no capital gains taxes. And I know for my clients that are coming from the UK, clients that are coming from Spain, clients from companies from Canada, that is not the scenario. So, is this a good time to buy in Dubai? Yes. Was yesterday better? Yes. But guess what? If you're going to continue to wait for tomorrow, then it is going to be too late. Another question I'm asked regularly is: how do I buy property in Dubai as a foreigner? And I'm going to try to go through this as streamlined as possible. Number one: in Dubai, first and foremost, make sure that you are working with a real estate agent, a certified international property specialist, that has boots on the ground to help guide you to make the best decisions. They will help guide you into what are called freehold properties, where you as a foreigner have the right to own the property outright. Then you work with that agent to understand what are your goals. Maybe for you it's to secure the Golden Visa. Maybe it's just to have that passive income. We know that through real estate is how you build wealth, generational wealth. Or maybe you're looking for that capital appreciation opportunity or diversifying from wherever you are. I have clients that are in the UK right now, liquidating, or India, or the US and Canada, and bringing it and diversifying here. So as a foreigner you have the right to buy property. You get into what is called an off-plan project. Off-plan is more than fifty percent of the market right now, and you can confirm this because Dubai is a very transparent real estate market. Check out DXP Interact, Property Finder, and the DLD website. Off-plan allows you the opportunity to get into a project pre-construction, typically twenty to thirty percent less expensive than a ready-made project. Now, not all off-plan projects are made equally. Not all developers are made equally. That's again where working with a real estate agent with boots on the ground here in Dubai, with experience and connections, can help guide you to the opportunities that are going to give you the maximum ROI. If you're looking for an investment, or the areas that are the best for you if you're looking for your family or for you yourself to come live. For example, if you're telling me you're coming, you're moving here, you want to work, you want to be part of the hustle and bustle, and you know that active lifestyle, that would be a different area than, let's say, you want to come and have your kids enter into the school system here, the award-winning school system, and enjoy the diversity and the safety of raising a family here. Or if you're looking for an investment: that's also different if you're looking for short-term or long-term. So all these matter in order for us to help guide you. And then, of course, your budget, and understanding how the off-plan payments work. Because you have to look at your budget and look at the average construction period, which is about three years, depending on the developer and the project. Over those three years is when you're going to be paying, let's say, maybe seventy percent of the purchase price. Well, right before handover, you can either sell the project, make your capital appreciation, and make the remaining payment, unless there's a post-handover payment plan, which is rare, or secure financing, which addresses another question. Can you secure financing as a foreigner in Dubai? You absolutely can. I've addressed this multiple times on The Dubai Connect podcast where I've had Mortgage Finder come on and talk about the process and the paperwork that's necessary. But yes, you as a foreigner can secure financing for your property before the handover. And in fact, those interest rates are more affordable than in the US and in Canada. And with the rental returns being as high as they are, many times that amount is going to be less than what you're collecting for rent. I don't know where else in the world that's happening. So the key steps to making the best decision as a foreigner looking to buy real estate in Dubai is to make sure you don't buy directly through the developer so that you can have objective advice about where to purchase, and that you make sure you understand the payment process so that you know what budget you have to work with. And don't look at Dubai as a flipping game. This is not a stock market. This is a place that you come in and you have a longer-term vision. At the very least, if you are looking to flip your property, please do not come in thinking you're going to do that until right before handover, as that is the sweet spot. That's when the buyer is able to go and secure financing to come and buy the project from you. So make sure you understand and have solid advice about the best time to sell your project. And really, the smartest game to play right now in Dubai is to be in it for the long haul. And for me, when I direct and advise a client, I like three things to be in play. Three factors to be in play. The three factors that I like to be in play is this: an area that they're going to make capital appreciation, so it's not already overdeveloped and there aren't already going to be too many competitive units. Number two: is it an area that would secure long-term rental returns? And number three, and this means it's going to be a little bit more expensive: is this a prime area where they can secure short-term rentals? Because that's where the money is. Another question that I was just asked by clients that are in town yesterday: are there hidden costs to buying real estate in Dubai? Well, for off-plan, please rest assured there are no hidden costs. Just always keep in mind that there is a one-time four percent Dubai Land Department fee when you purchase a property. And if you're also worried about real estate agents, our commissions are paid from the developer. So no, there are no hidden costs. But do be aware of the four percent DLD fee. Another question that I'm asked is: what is better, short-term rental or long-term rental in Dubai? The truth is it depends on your goals and it depends on the money that you put into the property. Why do I say that? Because not every area is primed for short-term rental. So if that's what you're getting into, and someone's telling you you're going to be able to short-term rent it, I'm not sure. You can easily go into Airbnb or Guest Ready and you can see which areas are demanding the highest short-term rental returns. But of course, those are going to be the more prime areas. Short-term rental return on average we say is about three percent higher than what you can expect for a long-term. But the advantage of a long-term is that you're usually locking that in for one year. So you're getting that one check, or maybe it's spread out over a few payments, and you're securing that tenant in for a whole year, which of course is going to give you the comfort to know that that income is coming in for the property, locked in for an entire year. However, because of the ease of doing short-term Airbnb and rentals here in Dubai, I do always like to advise my clients to just push that number just a little bit higher. So we at least have that option of securing that additional income if we want to do short-term. Let's say if you have a waterfront property, of course, that's going to garner higher short-term rental returns. Or if you're in a highly desirable location, let's say Expo City or in the middle of Dubai, let's say in Sobha Hartland 2, there are certain areas that are going to deem that short-term rental income. And it really is easy and streamlined and done digitally. So the way that we in the US think, uh, we have to get on a plane, fly to Arizona, and handle maintenance there because something went wrong. We don't want to be gouged by the people redoing it. That's not the situation in Dubai. Everything is managed by courts, by the DLD. There's a special court even for short-term rentals. There's a special court for tenants. So you are protected. You are welcome to make your money here, with no property taxes, no capital gains taxes. How much should I invest in Dubai to get the Golden Visa? I've actually addressed this straight with the source, Zeba Maia, on my podcast, The Dubai Connect. But I'll answer it right now. For two million dirhams, you are able to secure the Golden Visa. And what's even cooler is they continue to make it easier. Before, you had to wait until that off-plan project was finished before you were able to get the Golden Visa. Now, as soon as you have the Oqood, you can start the process of that Golden Visa. Where you can sponsor your spouse, your unmarried children, your parents, and your domestic help. And you can benefit from benefits such as having the driver's license, access to medical care, opening a bank account. And again, it's renewable for ten years. What are the top off-plan projects in Dubai right now? Dubai is a very dynamic real estate market. The answer to this is changing constantly. So what I answer you today is going to be different in probably three weeks from now. And with how quickly projects sell out, it doesn't even matter if I tell you what it is today because it probably won't even be available in three weeks from now. So I'm not going to answer what are the top off-plan projects. I would rather say what are the areas to consider. And I constantly show you by who I bring on, who the developers are to trust. You could just check out The Dubai Connect and that will give you insight into which developers to look for. So with regards to areas, let's look at some of the top waterfront locations to look for right now, which are opportunities. From the south, you have Palm Jabel Ali, which we call Palm Jumeirah 2.0. For those people who maybe missed out on the success story, the significant success story, the most iconic neighborhood in the entire globe of Palm Jumeirah, Palm Jabel Ali is an opportunity to get in to what's going to be shaping the coastline of Dubai. Then if you move further along the coast, you have what I call the trio of waterfront locations: Maritime City. But there isn't that much left of waterfront opportunities beyond Omniyat. I've done a few videos on them and have been able to connect some of my investors with those opportunities. They have, I think, three or four towers left to launch that are waterfront towers right on the sea. But Maritime City is an exciting area because again, as an investor, if you get in at pre-construction, underdeveloped pricing, then you get in while it's still considered affordable, and you get to ride the wave of that capital appreciation. And if we look at Knight Frank and we look at their report about waterfront properties, we know that they generally secure higher capital appreciation and rental returns. And then you look at the connectivity of Maritime City to, let's say, Downtown Dubai and Business Bay: ten to twelve minutes. You look at the RTA announcing that Maritime City is going to be on the Red Line now. So you have the metro now that's connecting Maritime City to the center of Dubai, meaning Downtown, where people work, Downtown Dubai, etc. And so all this brings incredible opportunity for investors. I actually would love to live there myself because it's incredible: the amenities, the lifestyle, the way you feel, the sea, the views. It's gorgeous. And then Maritime City is connected through a beautiful pedestrian walkway to Port Rashid, Yacht Marina by Emaar. And of course, Emaar, famously known for the Burj Khalifa and the Dubai Mall, one of the most globally renowned names in developers. And that is a low-rise community. But that entire Rashid Yacht Marina is kind of like the Marina 2.0. High-end restaurants, retail shops, a destination for people here to come and hang out. So what does that bring again? Opportunity for investors. This is then all connected to Dubai Islands, also a master project by Dubai Holding, Nakeel, and Emaar MTA. Dubai Islands is going to continue to develop and have off-plan projects launching for the next few years, and there are multiple developers that are going to be launching in Dubai Islands. So it's important to work with your agent to understand which opportunities might be a better fit for you. Now, another area that I talk about often is Dubai South, which includes Emaar South and Expo City. Oh my goodness, I talk about Expo City all the time. Why? Because it's a government. The government is developing Expo City. 24 billion has already been spent on the infrastructure, which is usually the most expensive part of any master community, reducing your risk. There are four sources of income for an investor when they go into Expo City. You have the Wasel Dome that has weekly events, and the exhibition center in Expo City is announced going to be the largest exhibition center, where everything's moving from the Trade Center over to the exhibition center in Expo City. You have the metro that pulls right up to it. You have offices already in use by Fortune 500 companies in Expo City. And then you're right next door to the Al Maktoum Airport, which will be the largest airport in the world, bringing traffic. So Expo City is great for capital appreciation, short-term rentals, and long-term rentals for people that are working in that area that want to live in this futuristic city of the future that's pedestrian only. It's so cool. I have so many videos so you can visualize it. It's beautiful. The dome, the Wasel Dome, is actually in the Guinness Book of World Records as the largest outdoor immersive dome. Events pull people there from concerts to government events, etc. Another area that's considered to be the new Downtown is Dubai Creek Harbor. And again, the master builder is Emaar. So anyone who's missed out on the opportunity of Downtown, you look at Dubai Creek Harbor. Which, what I love about Dubai Creek Harbor, is it makes you feel a little bit outside of the hustle and bustle, but yet the views are epic and iconic of the Downtown Dubai skyline. But you're connected easily through the boats, through driving, just minutes from Downtown. And it's this whole concept of a master community again. So with a master community, you're going to have your entire lifestyle needs met in that area, and it is just gorgeous. You can watch some of my videos to see some of it. Dubai Hills Estate will always do very well. If you could just look at Property Finder and just check out the rental returns that come from Dubai Hills Estate. And Sobha Hartland 2 is an incredible area as well because it's considered waterfront. Even though it's not on the sea, it's on three swimmable lagoons, gorgeous swimmable lagoons by one of the most reputable developers in this entire area, Sobha, known as the Palace Maker. They're known for timely delivery, which means your money is working for you quicker, not with a delay. They're known for high quality, which means when I go to resell or rent out your property, they already have strong brand awareness and incredible customer service. And the area is right in the middle of everything. It's in MBR City, Muhammad Bin Rashid City, right next to the Ras Al Khor Sanctuary. It's a very green community. Again, the concept of a master community where your lifestyle needs are met when you enter. Just ten minutes from the Dubai Mall. There's going to be a mall built there, minutes from a golf course as well. So that's another area to watch. But again, the answer to what are the top projects to invest in Dubai real estate, the top areas, it's really dynamic. The one consistent strategy I would say to keep in mind is follow the Master 2040 Plan. Because if it's aligned with the Sheikh's vision, that means money is going to follow. With the infrastructure, that means government support is going to follow, and it's a sure ticket to success. Should I trust a new developer in Dubai? First and foremost, please allow me to let you rest assured knowing that the possibility or potential to be scammed in Dubai is little to none. Why? Because the Dubai Land Department has a regulatory arm called the Real Estate Regulatory Agency that oversees all real estate transactions in Dubai. It's not a situation like it was before this was in place, maybe back in the 1980s or even in the 2000s, where any developer could come and start building. No, you have to show that you have a certain amount of money in the bank that's going to be able to see this project to completion. And when you're making payments for your off-plan project, it's done through an escrow account that is managed by RERA. And before they release those funds to the developers, they have a consultant that's going and making sure things are coming along nicely. So chance of being scammed: little to none. However, that does not mean that every investment is going to be a smart investment. And that is why which developer you choose to work with is one of the most important decisions you can make. I like to look at the track record and history of a developer. Now it doesn't mean it has to have a track record and history specifically in Dubai or the UAE. We can try to understand what that developer's history is globally. For example, there's a developer that has had significant success in the UK or in Singapore or in India. Understanding that and looking at that and seeing why did they come to Dubai? What are the areas that they've chosen? What is the reputation in those other global markets? Did they deliver on time? Did investors make money? Were they there for their investors post-sale? Did the finished product actually match the renderings and the catalogs that they presented to those investors? Was the customer service solid? How's the resale value for their projects? A lot of factors go into when my colleagues and I advise and say this is a developer that we trust. So the answer is: should you trust a new developer? It depends. It depends on who they are. For example, Beyond is a new developer, but it's Beyond by Omniyat. Omniyat has a very proven successful track record here for the most ultra-luxurious projects, such as the Dorchester and Opus. Omniyat chose to now create Beyond by Omniyat for the more affordable luxury segment. Yes, I would trust them even though they're considered new. So that is a question which it's not easy to just answer in one little video. Talk to your agent. Understand the profile of this developer, their track record, whether it's in Dubai, the UAE, or globally, or who they're backed by. So I've just addressed some of the most commonly asked questions in Dubai real estate, and I've done it because you have reached out to me asking me these questions. I suggest you continue to do so. I am fulfilled by helping guide my global investors into Dubai real estate and making them feel comfortable with being part of the future of real estate investing right here in the city of Dubai.