Tourism A Blessing For Dubai

For the past few years Dubai has proven itself to be the darling of the property investment world both within the Middle East and beyond, it continues to offer high rental yields and a very good capital growth rate of near 10% which we see today.
Yet Dubai's development has not just been restricted to the real estate sector, the tourism sector has grown by leaps and bounds in the past 3 years alone. With tourists staying in Dubai hotels numbering 5.4 million in 2004, whilst in 2006 tourist staying in Dubai hotels grew significantly to 6.5 million people. With the number of hotel rooms and flats numbering 40,862 in 2006 and the government of Dubai aiming to reach a target of 8-10 million tourists by 2010 shows that there is at present a significant gap between growing demand and availability of supply for tourist accommodation which may be increasingly felt as major future attractions such as Dubai land and Dubai Sports City open for business.
This level of growth in the tourism industry in Dubai has led to a very high occupancy rate for hotel rooms and apartments for example the occupancy rate stood at 85% in January 2007 alone. This has presented Dubai and UAE property investors as a whole with a splendid potential to capitalise on this growing market, the traditional method of property investment in such as buy to lets in Dubai may offer investors around 8% rental yield per annum. Yet short term letting tenants are charged hotel rates per night which depending on location and quality of properties, landlords can stand to make 10-15% rental yield per annum at today's hotel rates.
This is a situation which is not solely confined to Dubai, it is also very much applicable in other Emirates such as Ras Al Khaimah especially in established resorts such as Al Hamra Village , where hotel accommodation does not suffice to meet demand. A common question asked by many investors is what is the best way take advantage of accommodation supply gap in Dubai?
There are two main routes which buyers can take with regards to this:
The 1st method is to purchase an apartment or villas and utilise a high quality property management company which will take care of an investors property. Normally the management charge will be 20-25% of an apartments rent per annum. It may also be necessary to buy a furniture package from property management company which may vary in cost between £2-£5K.
The second option available to investors is to purchase a hotel apartment in one of the key future tourist locations such as Sports City in Dubai, such as The Cube. These developments are often managed by 5* hotel companies which will in many some occasions give investors rental guarantees and 30 days complimentary stay within the hotel. These are developments in a majority of cases will be fully managed, maintained and furnished with no additional cost to yourself.Those property investors looking for long term investments who do not intend to move into their properties should consider the hotel apartments as their ideal investment solution. It is a type of property which does not require any significant effort on behalf of investors in terms of finding a capable property management firm to maximise property rental turnover, which saves both time and money. Short term holiday letting is the ideal form of buy to let for the savvy Dubai investor, with rumours of rental stabilisation in the traditional buy to let market, holiday home letting presents one the best potentials for sustained high rental yields.
By Hamid Shah Director of Mirage Real Estate Ltd - a UK based firm specializing in Middle Eastern investment properties.

Buying a Property in Dubai

Buying a property any where in the world is daunting experience but what makes Dubai an even tougher one is the fact that there are so many various new developments on offer in newly developed areas which buyers don’t know how will these areas turn out to be. If you buy a property in community which has already established itself then you know what you can expect but buying off plan property is like buying a dream which may turn into a dream home or it can turn into a nightmare. Buying off plan is not for the weak hearted that’s why it should be left for those who are really willing and daring to take a chance on a vision.
If you decide to invest in this young market which is establishing itself as the best real estate market in the middle East then you should take your time and do some good research first, you will see that buying in Dubai may be a wise investment after all.
Dubai is a city that has to be seen to be believed. With government that uses creative thinking when it comes to building new resorts or approving daring architecture, it’s a place of change, excitement and growth. Billions of dollars have been pumped into its buildings, shopping and leisure facilities, making it one of the most desirable locations on the planet.
Even though developments on offer are many and different but then that can work to your advantage as you will always find something that can really suit you and your budget.
Dubai is already an incredibly popular tourist destination and if you’re looking for a property abroad with a difference, then Dubai is one of the first places you should look. It has a great climate all year round, although you are advised to go between October and May when the weather is at its best – the height of summer can be uncomfortable if you’re not used to it.
It’s not just the modern wonders of Dubai that attract attention. Ancient souks meander under the new glass towers and the remnants of trading in pearls and other goods contribute to the diverse culture and energy of Dubai.