In any investment portfolio, real estate looms large as one of those asset classes that can be incredibly lucrative if you do things correctly. If you know what you’re doing and are able to partner with the right professionals, there is tremendous potential to be unlocked. Some investors shy away from it because it can feel overwhelming or complicated, but in truth – it just takes a little bit of work and foresight and you can get round all of those hurdles.
Let’s look at some of the key considerations when you’re trying to make successful real estate investments:
Commercial Real Estate
When you’re purchasing commercial real estate, you’re looking for a burgeoning economic region that has lots of growth potential, but where the market has not been saturated yet – so that you can find well-priced property. The way that you make money is twofold. After purchasing the property, you can lease it out to tenants who pay you monthly rent – which can cover your bond repayments and any other maintenance costs that are associated with the property, and then hopefully a small profit margin on top. But the real value comes in terms of capital appreciation as you should be looking to sell the property in the future for much more than you bought it for. Getting this right all depends on location.
Ideally, you should be looking to invest in up-and-coming entrepreneurial ecosystems that will give you the long-term demand that you need to push property valuations up and up. Dubai is a great example of this because it is clearly a global economic hub, but it still has a lot of growth to come. If you drive around the city you will see developments going up everywhere because companies all around the world are setting up offices in Dubai – so it represents a great opportunity to find a commercial property that you can offer up to companies moving into the region.
Residential Real Estate
The way you make money with residential real estate has a lot of the same principles as commercial property, but with a few key differences. Firstly, the locations are different. As a residential property investor, you’re looking to find properties that offer the whole package to a potential tenant. It’s not enough to merely be close to the economic activity – you also want something that is close to schools, hospitals, shopping destinations, and a variety of other amenities. You should be sure to compare similar rents in the region and determine where you think you can get the best value for money – so you can offer a compelling deal to potential tenants.
All that being said, it’s worth noting that work does disproportionately affect where people choose to live so there is significant overlap with the commercial real estate discussion above, albeit that the residential properties are typically a bit further out from the city center. We still think that Dubai is a great option here because of the tremendous demand that we are seeing from all over the world as people move in to make the most of this new global superpower.
If you are looking to make some real estate investments in somewhere like Dubai, then check out Azizi Developments recent projects. They have got their finger on the pulse of what’s going on in the city and have direct access to some of the most lucrative investment opportunities in the region. By working with them, you’ll have a professional partner who can help you understand the local context and make the right decision for value maximization.