By Joel Greene
Hassle-free Property Ownership in Dubai
Interested in getting in on the Dubai condo hotel trend? Perhaps you've heard all the excitement about Dubai real estate being an investor's dream.
Or you think this new type of vacation home ownership sounds right for you. After all, a condo hotel unit, or “condotel,” is typically located in a great vacation destination. It's in a four- or five-star property. And a management company takes care of all the hassles typically associated with ownership, including maintenance issues, operation of the amenities and services, and finding hotel guests.
Buy Dubai Condo Hotels in Pre-construction Phase
With many new condo hotel properties coming on the market in Dubai, when is the best time to buy? The answer is easy; in early pre-construction phases.
Most developers in Dubai begin selling their condo hotel units long before the property is built, and often before even the first shovel-full of sand is overturned. The idea behind a pre-construction purchase is that you're buying tomorrow's property at today's price.
A Deposit Holds Your Dubai Condo Hotel Unit
In most cases, you reserve your condo hotel unit with a deposit of about 50%. That may sound high, but remember prices for Dubai condo hotel units are about one third the price of comparable U.S. units.
The deposit goes into an escrow account of the developer. The balance is due when construction is done and you close on your unit. Some developers do require payment in full before building completion.
The Construction Process
How long does it take to build a condo hotel? The weather, the complexity and size of the project, availability of building supplies and the city's permitting process are key factors.
Generally, the construction process takes approximately two years to complete. The developer or your salesperson should be able to keep you apprised of the building's progress.
Appreciation Makes Pre-construction Appealing
Some people wonder why they should buy in pre-construction phases in Dubai. After all, your deposit monies, 50% of the purchase price or more, are tied up for one to two years. The answer is you get in on the ground floor when prices are lowest and unit selection is greatest, particularly in a place like Dubai, which has only begun being developed and is just starting to grab worldwide attention among investors.
As the condo hotel is being built, it is gradually appreciating. And in a place as favorable as Dubai, that real estate appreciation can be significant, certainly well into double digits for each year that passes. Additionally, developers implement planned price increases at various stages of the selling process, often as many as three to five price hikes.
If you purchase your Dubai condo hotel unit at a pre-construction price, it could be worth significantly more at completion and even more after a few years of ownership. When you sell, that translates into a higher profit for you. The actual profit of course depends on the general market conditions, interest rates and competition.
Work with an Industry Expert
If buying a condo hotel unit in Dubai in the early pre-construction phase is best, how you do you find out about projects? After all, if you're like most investors considering Dubai these days, you're not living in the city. And even if you were, it's not as if there's a building structure to catch your eye as you drive by.
Your best bet is to find a real estate firm that specializes in Dubai condo hotels. Its associates will have regular contact with local developers who keep them apprised of new condo hotels becoming available. Additionally, their knowledge of the Dubai market will enable them to make recommendations regarding which ones you should consider and why.
Realtors who specialize in Dubai can provide you with enough data to analyze properties and ensure that you're comparing apples to apples. They'll likely be able to offer better choices for your consideration than the Dubai condo hotel you may have heard mentioned by a friend or in a newspaper article.
The realtor whom you choose should be familiar with Dubai's condo hotel developers and building trends. Most importantly, he or she should represent your needs as a buyer, first and foremost, not the developer's.
Joel Greene is the President of Condo Hotel Center located in Miami Florida, which specializes in the sale of condo hotels. He is also an expert on Dubai real estate. Visit his web sites, CondoHotelsDubai and CondoHotelCenter, for more information on condo hotels and to see condo hotel listings, photos and prices.