Investing in Smaller Properties in Abu Dhabi - Is a Good Deal or Bad Deal?

Everyone dreams of buying their own home at some point of time in life. It is, after all, a great investment option even if you decide against living or personally utilizing that property. You can always rent it out and earn the income. That is the reason why more people are now interested in buying their own properties in Abu Dhabi. But when it comes to property investment in the capital Emirate, people tend to get confused about the size of property they should buy, whether they should invest in smaller properties or buy the spacious ones.

That’s why we have put together this article to discuss if smaller property investment in Abu Dhabi is a good deal or a bad decision; let’s take a closer look.

A great investment option

Before setting out to buy properties in UAE, particularly in the capital Emirate, you should make the crucial decision after analyzing your prime purpose behind it. Finding out whether that property is for your own use or an investment option can be of great help. If you are keen to buy it purely as an investment then nothing can be better than buying smaller properties. In fact, smaller properties have been gaining more buyers off-late because of the market boom. That’s because there are plenty of choices available in terms of apartments as well as financing benefits.

One of the important benefits of such investment is that you can give your smaller properties in Abu Dhabi and enjoy the benefits. Like Dubai, Abu Dhabi also has many expat population who enters the city for a living or to study and requires a decent rental accommodation. While looking for rental options, most tenants are keen to go for smaller apartments because the plush four to five bedroom flats go beyond their budget. Hence, as an owner of one or two bedroom property, you will be able to cash in on this need and get a good return on investment at the same time.

While smaller or studio apartments are easy to maintain for the owner, they are convenient for the tenants. If your smaller property is located at prime locations such as closer to the main city, business hubs, public transports, and markets, it can earn you bonus points.

If you are looking to buy the property for your own use then there are many community living spaces being developed in Abu Dhabi at great deals for you to explore. Buying an off-plan property is one such option as the prices are much lower than the ready to move in flats in Abu Dhabi or Dubai. It also allows the buyers flexible payment offers, for example, pay only 10 percent while booking the property and settle the remaining amount after completion of the project. Moreover, these off-plan properties yield more returns in future as prices tend to increase over time.

A bad choice can have adverse effects

While investing in smaller properties has its share of benefits, it also has its disadvantages.

If you consider buying an off-plan property there are several risks involved such as property frauds, project cancellations or poor quality property after project completion.

On the other hand, rentals are relatively safer but not immune to risks. The rental rates fluctuate with time which can lead to lower ROI. Also, the repair and maintenance cost of smaller properties may surpass the benefits for the owner.

Apart from that, the location of your property also matters a lot. If you own a property at a lesser desirable location, it would be hard for you to find tenants, if you are not occupying it yourself.

Conclusion

As smaller property investment has both positives and negatives, it is best to assess your needs before making the final decision. Because in the end, it all depends on your financial capabilities and long-term goals.