Short-term real estate investors face numerous problems in Dubai as there are certain perils of owning property for shorter duration. For instance, tenant terrors considerably haunt the rental property owners in Dubai. The Dubai rental law is pro tenant. Government’s rent cap policies strictly govern the rent increases, and adequate security of tenure is given to the tenant. Initial rents can be freely agreed upon but no rent increase is allowed during first two years of the tenancy contract. The landlord is required to give a just cause of eviction before being legally allowed to evict a tenant. Thus we can conclude that the Dubai real estate law is quite biased in favour of the tenant and creates significant problems for the landlords as dealing with bad tenants becomes quite difficult for the landlord in light of these laws.
Another problem facing the short-term real estate investors in Dubai is the scourge of zoning. New landlords often buy a property without checking the zoning permits. Similarly rezoning can also create significant difficulties for the investors of Dubai properties. Likewise, new regulations, ordinances and bylaws can create a hassle for real estate investors. Some ordinances are particularly troublesome for the landlords. For example, some municipalities in Dubai hold the landlord responsible if the tenant disturbs the neighborhood in any way or puts other people in danger. It is important for the investors to keep themselves aware of the bylaws to avoid difficulties.
Yet another serious problem faced by short term real estate investors in Dubai is the extreme swings in the property’s desirability and value. In order to avoid this problem, investors should try to select a property in some central location or close to a major university or other important local amenity. In this way, real estate investors can avoid a sudden or unexpected fall in the value of their property.
