Dubai Rental Income Heaven of The World
Dubai rental income heaven of the world is not an overstatement and our recent research in this sector confirms those claims. Dubai offers rental income on average of 7.1 per cent, which is one of the highest in the world. In comparison, gross rental yields in Pakistan are 3%, Hong Kong are 2.82 per cent, India 2.22 per cent, Singapore 2.83 per cent and London between 2.72 per cent and 3.20 per cent.
A consistent rental income is some thing that I have always advised our clients to add in their portfolios. A stable flowing rental income frees you from stress and worries and is important for your over all success and happiness in life. Although in Pakistan you get lower rental yields but coupled with capital gains they do offer some good opportunities as long as you are smart enough to invest in right areas.
One of the dilemmas I have always faced as an investment consultant in Pakistan is to find a good rental yielding property for a mediocre investor. It is almost impossible to find any safe and high yielding real estate income between 2 to 5 Crores. The only options that you are left with in these prices is to invest in residential properties, low yielding commercials or serviced and hotel apartments which have added a new dimension in that aspect.
Lets have a look at some of the options we have in Lahore and their rental yields and net gains per Annam.
Keep in mind that we have calculated these stats based on the assumption that your property is rented out through out the year and there are no tenant issues. Tenancy related issues are very common in Pakistan and if we include that as a risk factor the average net gains on your wealth may go down by a percent or two.
In addition it is worth to note that only commercial or serviced apartments offer a substantial return on investment but with some downside. Good commercial units that offer this kind of return are usually high in price and not for everyone.
Residential serviced apartments suffer due to lack of trust on developers who do promise great returns but at the end it is Pakistan. So unless you are buying in Mall of Lahore, DHA Lahore Goldcrest , Pentasquare or some other big name reliable developer, you are at high risk.
Dubai Rental Income Heaven
A lot of my investors with exposure in the international markets have suggested to venture into the high rental yielding property market of Dubai. It took me months of research, discussions with investors and friends in Dubai and a little bit of convincing with one of the biggest real estate developer in Dubai “Damac” to finally make a blasting entry into Dubai real estate.
The statistics of rental yield in Dubai are startling and very much in favor of some one who is more interested in rental returns. Let us take a look at some of the figures below:
Dubai tops the list of developed countries list for offering rental returns at an average of staggering 5.8 % and up to an average of 7% when it comes to apartments.
The rental yield is not the only thing you should be considering when investing from Pakistan, some of the other factors which really makes it worth much more in comparison are :
- Rental returns on property are not taxable so when we say you will get 7% that means you will get exactly 7%. In Pakistan however the rental income is taxed by 10 to 15 %.
- The AED is pegged with USD thus you are hedging against the 5% average depreciation of PKR against dollar. This is also one of the major factor which has considerably effected rental property gains in Pakistan.
- The mediocre investor faces a dilemma in Pakistan of either investing in residential properties that offer very less rental yield alongside depreciation of construction or investing in cheaper commercials and entering a high risk zone with tenancy issues.
After complete analysis and study of properties in Dubai, I believe that it is time for you to spread your wings and fly to Dubai with imlaak.
As per the stats the overall value of the land transaction in Dubai is worth USD 70 to 80 billion, which is higher than the GDP of 144 countries in the world. It tops the list for attracting FDI in the world and the UAE govt is planning to keep it that way for years to come.
Dubai has really transformed into a rental income heaven. Investments in rental producing properties specially in the hospitality sector of Dubai for a steady and reliable source of income is a safe and profitable way to diversify.
Investment Consultant and CEO at Imlaak
Mob : +92 333 1717170 ( Whatsapp)