Investors wishing to make the most money on rental properties in the UAE should pay close attention to Dubai Marina and International City, among other places.
According to a new analysis by property portal Bayut.com, properties in these areas provide the most alluring return on investment (ROI) within the luxury and budget divisions.
Projections suggest that residential properties in Dubai Marina will have the best rental returns for luxury apartments at 7.04%. In comparison, apartments in International City will have the highest returns in the budget class at 9.22%.
For those looking for affordable villas, Jumeirah Village Circle will be worth considering because it produced the most alluring ROI of 6.9% in 2022.
According to Bayut, houses in the area have provided the “healthiest” rental yields of 6.95%, making DAMAC Hills a viable choice for those looking at buy-to-let villas.
For many investors, purchasing rental homes has been a popular choice. The UAE is a desirable location for investment due to the nation’s comparatively cheap tax structure, attractive sales prices, high tenant demand, and high-quality infrastructure and way of life.
Rents for apartments and villas have increased significantly over the past year due to the high demand.
Asking rentals for apartments increased by 39% alone in Dubai Marina. Currently, the average rent in the region for a one-bedroom apartment is AED91,000 (USD 24,775); for a two-bedroom apartment, it’s AED140,000; and for a three-bedroom house, it’s AED207,000.
Dubai Marina has become one of the most sought-after areas for potential purchasers looking for luxury residences.
According to Bayut, other well-liked areas in Dubai include Downtown Dubai, Arabian Ranches, and Dubai Hills Estate.
“Tenants looking for luxury apartments in Dubai have continued to be attracted to the properties in Dubai Marina during 2022,” the property portal remarked.
The cost of renting a flat has dramatically increased in Jumeirah Village Circle, a desirable location for tenants in the lower income bracket, by 14% to 24% in 2022.
In the previous year, renters were required to pay, on average, about AED36,000 for a studio apartment, AED51,000 for a one-bedroom apartment, and AED 73, 000 for a two-bedroom apartment.
Three- and five-bed apartments in DAMAC Hills 2 now cost about AED63,000 and AED98,000, respectively, due to a 9% increase in rent. According to Bayut, annual rates for four-bed homes “became more affordable” by 5.3%, with an average of AED74,000 in 2022.
However, retail prices have also increased. According to Bayut’s estimates, sales prices for condos and villas in Dubai’s most prestigious neighbourhoods will rise by 2% to 24% in 2022.
According to transaction data issued by the Dubai Land Department, Bayut, the demand for real estate in Dubai has continued to increase.
The real estate market has “outperformed expectations over the last year, with record-breaking transactions, attractive new launches, and favourable investment opportunities,” Bayut added.