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Chapter 4: Buying a Luxury Apartment in a Building Under Construction.
Below Real Estate Group describes the process of buying a luxury apartment in a building under construction in Abu Dhabi with the help of a real estate broker:
1. Choosing a Real Estate Broker: The first step in buying a luxury apartment in a building under construction is to choose a reputable real estate broker. Look for a broker that has experience in the Abu Dhabi market and has a good reputation. The broker should be able to provide you with expert advice on the best areas to buy an apartment, the expected return on investment, and other important factors.
2. Providing Documents: Once you have chosen a real estate broker, you will need to provide them with your passport, visa, and proof of income. These documents are required to verify your identity and financial status.
3. Requesting Documents: The seller will need to provide you with a copy of the title deed, building permit, and other relevant documents. These documents are required to verify the ownership of the property and the legality of the construction.
4. Payment: You will need to pay a deposit to secure the property and then make payments according to the payment plan. You will also need to pay additional fees such as registration fees, transfer fees, and agent fees. Abu Dhabi Municipality will charge a 2 percent levy on the purchase price. These amounts can be split between buyer and seller if all parties agree through the execution of a Memorandum of Understanding (MoU) signed by both the buyer and seller.
5. Risks and Insurance: When buying an apartment in a building under construction, there are several risks to consider such as delays in construction, changes in the building design, and changes in the market conditions. It is important to have insurance to protect yourself against these risks. Some of the types of insurance available for buyers of apartments include construction all-risk insurance, third-party liability insurance, and property insurance.
Chapter 5: Return on Investment for Buying and Renting Luxury Apartments in Abu Dhabi.
The return on investment (ROI) for buying a luxury apartment in a building under construction in Abu Dhabi with the subsequent resale of the apartment after completion of construction varies depending on the location, size, and quality of the apartment. According to a report by Metropolitan Capital Real Estate, the ROI for buying an apartment in Abu Dhabi in 2021 was between 5% and 7%.
The ROI for renting out apartments for long-term rent in Abu Dhabi also varies depending on the location, size, and quality of the apartment. According to a report by Bayut, the average rental yield for apartments in Abu Dhabi in Q3 2023 was 6.5%.
When buying an apartment in a building under construction, there are several taxes and fees that need to be paid. These include a 2% commission fee to the real estate agency when transferring the property to your name, a 2% levy on the purchase price charged by Abu Dhabi Municipality, and a registration fee for the leasable unit. When renting out an apartment, there are no income taxes in the UAE. However, there are other fees that need to be paid such as a rental tax of 5% for residential properties and 10% for commercial properties in Dubai, while in Abu Dhabi, expat tenants pay 3% of their annual rent as tax.
The commission fee charged by a real estate agency when renting out your apartment for 1 year or more varies depending on the agency. According to Betterhomes, the standard broker commission fees in Abu Dhabi are applied, which can be up to 5% of the total amount of rent.
Additional costs that may be incurred when buying an apartment for resale include the cost of furnishing the apartment, maintenance fees, and property management fees. When renting out an apartment, additional costs may include the cost of utilities, maintenance fees, and property management fees.
There are several risks associated with buying and renting out luxury apartments in Abu Dhabi. These include delays in construction, changes in the building design, changes in the market conditions, and tenant disputes. It is important to have insurance to protect yourself against these risks. Some of the types of insurance available for buyers and landlords of apartments include construction all-risk insurance, third-party liability insurance, and property insurance.
Conclusion:
Abu Dhabi is a popular destination for foreign buyers looking to invest in luxury apartments.
The city offers a wide range of options for those looking to buy an apartment in a building under construction.
In this article, Real Estate Group has provided a step-by-step guide to help you navigate the process of buying a luxury apartment in Abu Dhabi.
We have covered two strategies: buying an apartment in a building under construction for living, and buying an apartment in a house under construction with a subsequent sale after the completion of construction or renting it out.
For each strategy, Real Estate Group provided detailed information on the most attractive neighborhoods for apartment purchases, how to choose a real estate agency, what to consider when choosing an apartment for living and for investment, how to buy an apartment in a building under construction in Abu Dhabi with the help of a real estate broker, what documents you need to provide to the buyer, what documents need to be requested from the seller, when and how to pay, what taxes, fees, and other charges must be paid additionally when buying an apartment in a building under construction, what risks there may be and what you need to pay special attention to, what types of risk insurance are available for buyers of apartments, and what can be the profit at the investment strategy and what taxes should be paid at the investment strategy.
Looking to buy property in Abu Dhabi? Write to us on WhatsApp and we will select the best options for you. Everyone buys from us!
When compared to other countries, buying an under-construction apartment in Abu Dhabi has several benefits. The stability and security of Abu Dhabi are well-known. The city is friendly to both residents and investors because it is committed to upholding law and order. Additionally, property developers in the city spend more on security, assuring buyers that their investments are safe. Moreover, the process of buying a property in Abu Dhabi is smooth and convenient for expats. The city offers a wide range of properties to choose from, and the return on investment for buying a luxury apartment in Abu Dhabi is high. The average rental yield for apartments in Abu Dhabi is 6.5%, which is higher than many other cities in the world.
In conclusion, Real Estate Group would like to point out, buying a luxury apartment in an under-construction apartment building in Abu Dhabi can be a complex process. However, by following the steps outlined in this article, you can make the process easier and less stressful. Remember to work with a reputable real estate agency, choose the right apartment, and protect yourself against risks with insurance. With the right approach, you can find the perfect luxury apartment in Abu Dhabi and enjoy all that this amazing city has to offer.
