The city of Dubai is known as the hub of real estate investment. It has earned this title fair and square with the blooming opportunities for investors. With the development of new residential projects in different parts of the city, investors have many lucrative opportunities to invest their money and have a continuous stream of earning.
Investors in this city can invest their money in two types of properties – freehold and leasehold. Freehold property in Dubai gives not only the right to the property to the owner but its land on which it is constructed as well. The name of the buyer/investor is registered as “landowner” in Dubai Land Department’s records. On the other hand, with leasehold property, the right of land remains with the owner while the leasehold gets the property rights that too for a limited period. This time period lasts for 99 years; however, can be extended with the mutual consent or agreement of both parties.
If you are planning to buy property in Dubai and are considering the freehold option, this post contains an in-depth guide that will help you to make an informed decision.
Perks of Buying a Freehold Property
Have a look at some of the perks/advantages of investing in a freehold property:
The biggest of all perks of owning a freehold property or investing in one is complete, unrestricted ownership. You will be in complete control of the land. Whether you want to sell it or keep it for yourself for good, you can do so without facing any major hassle. The owner is also free to lease this property to someone else.
The Property Remains in the Family
As the contract for a freehold property is applicable in perpetuity, it can be inherited by the heir of the landowner in the case they pass away.
Authority to Make Structural Changes to the Property
You can also make any changes or modifications, irrespective of its nature, to the existing property without having to seek consent from anyone as is the case with leasehold property. If the leaseholder wants to make any structural changes, they have to get written permission from the real owner of the land. However, ensure the changes you want to make in the structure of your property meets the criteria of the neighborhood the property is located.
Opportunities for Everyone
Any person can buy a freehold property in the UAE regardless of the fact they are a UAE national or not. Foreign nationals who live abroad can also invest in such a property. However, there are certain restrictions in terms of areas where they can buy a freehold property.
Apart from the basic two-year visa, freeholds enjoy additional visa benefits in Dubai as well. Not only the landowner but their immediate family also get entitled to have a renewable residence visa of the UAE.
Buying a freehold property also has a flipside associated with it. It is important to know about these drawbacks before you plan to buy property so that the investment can prove to be fruitful for you in the long run. Have a look at some of these drawbacks:
Restriction for Foreign Nationals
As stated above, foreign nationals face some restrictions when buying freehold property in Dubai. There are some designated areas that have opportunities for them to own such a property. Particularly speaking about Dubai, designated freehold areas cover 23 neighborhoods. This vastly limits the choice of the investors as they have only a few selected communities to choose from.
Complete Responsibility of the Property
The responsibility of any sort of maintenance falls on the landowner. It doesn’t matter if the property is leased to another party, it is their responsibility to take care of the maintenance of the property and if it requires any structural changes. This can prove to be a hassle and an additional burden on the pocket at times. However, consider it as an investment on the property as regular maintenance will help you to get maximum capital gains.
The opportunities for buying a freehold property in Dubai are plenty but don’t make a hasty decision. No matter how lucrative the offer may seem, always take your time when investing in a property. Compare the pros and cons of freehold and leasehold options. Consider all the factors that are important when buying a property in Dubai and then make a well-researched decision. A rushed decision can land you in a troublesome situation in the later stages. Hence, never make this mistake of rushing into things. Also, whether you plan to buy a freehold property or leasehold, buy it from real estate agents or developers who are approved by the government. This minimizes the chances of fraud and scams.