Tatiana Phanti is the founder and managing director of T.M. Properties, a leading multi-disciplinary real estate agency in Dubai. She agreed to sit down for an interview to share her expert opinion on everything you’d need to know to get in on prime real estate investing in Dubai.
Dubai is beautiful; but how reliable are investments in the world capital of luxury?
“Investing in real estate in Dubai is safe. In the entire history of the United Arab Emirates, there has never been a banking crisis. The real estate market is stable, especially lately. Therefore, investing in real estate is profitable. Investments are insured by the state: payment for the project goes to the state account. The state transfers money to the developer only at the end of the project.”
What is the UAE economy like right now?
“The economy of the United Arab Emirates is stable. For many years, the dollar to dirham exchange rate has remained unchanged. Dubai does not stand still – it is always developing, trying to be number one. The tallest building in the world is in Dubai, the most beautiful building in the world is in Dubai. We also have the world’s largest shopping centers. The list of attractions here is endless.”
Is it true that foreigners aren’t allowed to own Dubai real estate?
“Not anymore. Any foreign citizen can purchase real estate both for their own residence and for business. There are options for all different budgets. Our clients include affluent businessmen and middle-class customers. All developers provide installment plans with a convenient payment schedule and there’s no bank interest. Banks give mortgages at 3-4%, a fairly low percentage compared to other countries.”
What are the investment options?
“There are four real estate investment options:
1) for personal residence;
2) for subsequent delivery;
3) for resale;
4) investment in service apartments in a hotel and in finished rooms in a hotel.
“When choosing a property in Dubai, it is important to understand what kind of property the client wants to purchase. There are 2 types of real estate: lease and freehold. Freehold means unlimited private use. A lease is for 99 years. The first buyer purchases the property for 99 years. When buying on the secondary market, the period of ownership is reduced by as many years as the previous buyers owned. For example, two previous owners owned the property for 10 years. Consequently, the right to own the third will no longer be 99, but 79 years.”
Can you tell us more about resale?
“Yes; and it does have some nuances. It’s important to enter during excavation and buy property at the beginning of sales – getting in on the ground floor, so to speak. That way you can choose the most advantageous option for the price, considering layout, the view, the amenities, etc. All these factors affect the investment attractiveness of the transaction.”
Should interested investors hire a professional firm?
“Absolutely. You’ll definitely want help from a professional agent so as not to miss the moment. The most interesting options are sold out in a matter of days. Our agency always keeps abreast and one of the first to know about the start of sales. We will also guide you on which floor to choose, where the view will be best.”
Tell us about hotel investments.
“You can invest in service apartments at a hotel. These are rented out by the hotel itself, so they’re doing all the work. For 350 days a year, this room will be rented out. You as the investor receive 80% of the rental income, and 20% goes to the hotel. Or, you can live there yourself. There are many options. The annual income of investing in real estate averages 7-8%, in some cases, 13%.”
How do you choose a reliable developer -and trust that they won’t go bankrupt?
“Let’s start with the fact that the choice of a developer primarily depends on the needs of customers. If the priority is reliability and punctuality, we form a list of vetted companies with an impeccable reputation. There are younger developers that are also excellent, though. As I already mentioned, all real estate transactions are reliably protected by the state. The funds are retained by the state and are transferred to the developer only at the time of handing over the keys.
“An agent plays an important role in working with developers. It helps to navigate in an unfamiliar market, so you’re warned about all the nuances, and the agent conducts a transaction quickly, cleanly, and without trouble. Another thing to consider is repairs. Real estate agencies and brokers help the client work with the developer to dictate the appropriate indicators of repair work, based on price and location.”
At what stage is it profitable to invest in real estate?
“It’s most profitable to invest at the construction stage. The potential for price growth by the time the object is delivered is up to 35%. But it all depends on the builder, as some only open sales after construction is completed. To choose the best option, it is important to seek the help of a professional. It will help you not to miss the start of sales, because investment-attractive options are sold like hot cakes.”
What are the advantages of investing in Dubai?
“Dubai real estate is soaring in profitability right now. Investors and entrepreneurs can get Golden Visas with benefits when they buy property. The Government of Dubai and the UAE make sure that talented and enterprising people can live here in peace and plan their future and, as a result, invest in the Emirates. We also have enticing investment conditions, such as a lack of corporate and income taxes, a plethora of investment opportunities in every industry, and a low VAT rate (5%). Everything speaks in favor of choosing this region for business development.”
So you can actually get a visa when you buy real estate?
“That’s right. Times have changed, and now anyone who invests in real estate can apply for a residence permit in the United Arab Emirates under certain conditions. To obtain a resident visa for 3 years, the minimum value of investment in real estate must be 750 thousand dirhams ($210k USD). Once that is paid and the object handed over, the client gets a residence permit and a 3-year visa. Then they can open a bank account and continue to invest.”
“In September, a new law was passed to allow an investor to obtain a resident visa for up to 10 years, provided that the value of the purchased property is at least 2 million dirhams.”
How long have you been investing in Dubai?
“I have extensive experience in developing international business – almost 20 years. I spent 13 of them in Cyprus and the last 7 years in Dubai. The investment portfolio of our clients amounted to about $20 million USD in the last quarter. Our clients are well-known entrepreneurs, businessmen, and top entertainers from Russia. Unfortunately, I cannot reveal the names, but our agency is known to high-profile personalities. This is a guarantee of quality when buying property in Dubai.”
How can your agency help other investors?
“We provide a wide range of services for corporate and private clients in the UAE (from starting a business to property management). We provide entrepreneurs with a high quality of life and efficient business conduct. Not all of our clients are fluent in English. We’ll fix it. We accompany real estate transactions from the construction stage to the moment of delivery, we check all documents, we help with property management. Our company is a reliable agent, with which clients have only one thing left to do – to enjoy their new property.”
For more information, visit https://tmgroupuae.com/