Landlords shouldn’t view ongoing expenses such as property management fees as a bad investment, says Lina Allaoa, Associate Partner at Driven Properties – the smart money is thinking long-term.
My motto is: ‘scared money doesn’t make money,’ so if you have invested in any way in Dubai it means you believe in the vision and growth on offer
Living in Dubai since 2012, I have witnessed the many waves of the local real estate market – as well as the development of the city’s landscape.
Last year saw the spotlight placed on (and off) different developers influencing typical buyer and tenant behaviour and expectations.
Endless new project launches forced developers to come up with the most competitive payment plans the region has ever seen. The result is sentiment has been nothing short of confusing.
In response to the shift in the market, the role of a broker has transitioned from a flashy sales person to being more of an advisor, where relationships are built on consistent expertise with a client’s long-term goals in mind – as opposed to the quick win.
This natural shift in real estate dynamics has wiped out developers, brokers and brokerages alike that did not adapt.
The void has been filled with talented brokers and brokerages that have expanded their services to encompass every step of the buyer’s journey and investment needs. Examples include added services such as investment advisory, interior design, holiday home rental, conveyancing and, most crucially, property management.
For all stakeholders involved, it is always better to take a medium to long-term view while investing in property. The essence of this for an owner would be ensuring that their property keeps its value and is well looked after. Property management services maintain the condition and value of an asset by choosing the right tenant, ensuring preventative maintenance checks are carried out rather than reacting to emergencies, and ensuring clients remain legally compliant within regulations and law.
These days, we are increasingly witnessing the creme de la creme tenants preferring professionally managed properties when shortlisting selections. So, although rents are declining, it is imperative that landlords don’t think of expenses such as property management fees, inclusive chiller charges and complementary contract extensions as a bad investment.
On the contrary, more needs to be done to source and retain good tenants. In the past twelve months we’ve noticed that on expiry of their rental contract our tenants fell into one of three categories – renewal, purchase or migrate.
My advice on how to retain the value of your asset is, firstly, select a reputable property management company that has area specialist brokers on an exclusive basis. Secondly, provide added value wherever possible back to the tenant to encourage them to renew year-on-year until they get to the stage of financial capability to purchase the property.
Dubai has always proven itself against the naysayers and I advise my clients to reinvest their profits into owning units in new projects that have competitive payment plans so they can begin the investment cycle again.
Without a doubt, my developer of choice has always been Meraas as their projects continually fill the lifestyle gap that so many expats relocate to Dubai for. Not to mention they never duplicate a project, each one standing on its own merits for the discerning investor and tenant.
Dubai continues to grow and will always remain a hub for all kinds of business – not only in the MENA region but across the world.
My motto is: ‘scared money doesn’t make money’ so if you have invested in any way in Dubai it means you believe in the vision and growth on offer here. Therefore, you are not susceptible to negative warnings of potential doom and gloom. The fact is, many mature markets witnessed the same and lived to tell the tale with no regrets.
My advice is: limit your advice network. Everyone has an opinion on the market and has become a self-proclaimed overnight expert on property trends and forecasting.
Provided your investment strategy is in tune with long-term growth instead of short-term gain, the prospects and potential are guaranteed to be bright.
By Lina Allaoa, Associate Partner at Driven Properties
This article was originally published in Prestige March / April 2019 edition.