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There are two ways to make a return on your investment. Capital growth, the amount your property increases in value from the time you have purchased it and rental income, the amount of rent you can charge for your property once it has been completed.
The market demand for properties is currently far greater than the supply, thus maintaining a buoyant market.
Capital growth varies between developments in Dubai but for the purpose of this exercise we shall assume prices to increase by 10% pa whether off-plan or built.
We will assume a two year construction period and a 10% guaranteed rental return for three years once the property is built.
* Casa Dubai do not guarantee that the information below will apply to all investors, it is purely an example and investors should consider that property prices may go down as well as up.
Initial property purchase price: £100,000
|
Capital Growth (%) |
Actual (£) |
New Value (£) |
Rent |
After year 1 |
10 |
10,000 |
110,000 |
0 |
After year 2 |
10 |
11,000 |
121,000 |
0 |
After year 3 |
10 |
12,100 |
133,100 |
10,000 |
After year 4 |
10 |
13,300 |
146,400 |
10,000 |
After year 5 |
10 |
14,640 |
161,040 |
10,000 |
Increase in Capital value of property (£161,040 - £100,000) is £61,040
Total Rental Income is £30,000
Potential Return in 5 years £91,040.
Casa Dubai recommends a minimum 5 year investment to maximise the above returns, shorter investments are likely to result in lower returns. |