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and you should be given a receipt from the agent for any deposit that is paid over – provides a good paper trail.
Having been in Dubai mid last year regarding a property development job there are a few things to think about: The rental market is being driven hugely by construction i.e. expats in property & finance and skilled/unskilled labour for construction work. While they continue to build the market is reasonably self sustaining. If the construction stops or slows significantly (not likely in the near future – Nakheel alone is building a new city for about 1.4 million people) then alot of people will simply leave as the work will dry up i.e. the rents will crash and prices will follow. The dubai government is working hard towards turning dubai into a world trading post (research their freezones) and major tourist attraction – whether this will be achieved is not certain – if it is achieved then a slow down in construction will be largely mitigated by the increase in these areas . There is a very mixed quality of developers up there …. do your research on how many developments they have completed and try and view some of the completed buildings, talk to the owners/occupiers etc before buying. I have never heard of a development being completed on time in Dubai (seriously!) so factor in plenty of time extension risk (12 months would be safe but I have heard of buildings being completed more than 2 years late).
All that said Dubai is a great city – and you get a residency visa with your purchase (doesnt allow you to work but allows you to live there if you want).
There has been ongoing speculation of a very decent price correction (read crash) in Dubai – do your research and if you see the crash as coming then cash up and wait for it cos there will be alot of bargains to be bought!!
Use HSBC to fund your purchase if you go ahead as they are one of the prevelant banks over there and can be easily managed from abroad.
Goodluck!
Do a search on “relocatable houses” I know in NZ there are companies who specialise in these. I.e. you can go to their yard and view all the houses they have – usually included in the price is the transport and re-piling costs.
Originally posted by kpi:Hi Peachy,
As an ex estate agent I know from experience that some vendors get very nervous about accepting an offer with no money down. I am in Victoria and $500 was usually enough, however, the initial deposit has no advantage to the estate agent, so try and listen to what the agents advice may be as they will know what their client would prefer.
I have found alot of agents like the deposit to be a minimum of what their commission is going to be – if the deal falls over after it has gone unconditional usually the agent is still entitled to be paid part or all of the commission. So often this is the motive behind an agent who wants a bigger deposit out of you.
sorry cant answer your question on buying with only a working visa – but I was interested as to why you say renting is a no no to most investors? I have always been of the mind that you are better off renting as you probably want to live in an area where a mortgage costs far more than renting the same house …. therefore freeing up capital for investing and spending less of your income on mortgage/rent giving you more disposable income??
i.e. a $500,000 house in Auckland might only cost $500 pw to rent where as an 80% mortgage will set you back about $730 per week. Therefore you keep your $100,000 deposit and $230 per week to invest with in positive cashflow areas.
John Burley’s – 7 money secrets of the wealthy (something like that anyway) was my big catalyst book that got me taking action. Highly recommend it.
Thanks for all the ideas …. good news over the holiday period my rental manager has managed to rent two more of them. So now with 3 out of 4 gone the property is sitting cashflow neutral. Time to rent the last unit and then work on selling them.
Cheers
Thanks for that numbers as follows:
Purchase of units $520,000
Cost of refurb $70,000
New valuation $680,000The one rented unit is rented at $260 per week. That is what I want to achieve for the others also.
The units are in Linwood which is not the best area in Christchurch but there is alot of redevelopment going on and it is 5-10 mins from the city centre. Close to a large shopping centre also.
Im tempted to agree and give the current rental manager till the end of Jan to get some action – I have been recommended another manager who sees no reason why they shouldn’t achieve the $260 pw asking price (this could be just all talk to get the business though).
Cheers
