Why A One Room Apartment in Dubai Is More Valuable Than A Studio and What Real Estate Should You Buy If You Want to Rent It Out?

It is important to know the fact that rental of property is in significant demand in Dubai. 

Should you buy real estate in Dubai or another emirate of United Arab Emirates and which option is better: villas, apartments or studios?

A large part of the city’s population consists of foreigners, for whom renting property in Dubai is much more affordable than buying it.

This is an average situation even without considering the year-round flow of tourists in United Arab Emirates.

In such conditions, property purchase for subsequent lease is a rather smart move.

However, in order to ensure maximum profit from such investments, it is essential to correctly evaluate what type of real estate and in what district you should buy.

Before buying real estate in Dubai, you will have to decide how exactly you are going to use it. If you are buying property for personal use, you should consider your individual needs and preferences, as well as the presence of a traffic intersection and a relevant social infrastructure.

If, however, you are buying property for its subsequent lease (both temporary and year-round), you will have to conduct a much deeper analysis.

When buying a rental property, it is primarily important to focus on the preferences of your potential tenants.

This relates not only to the district and residence selection, but also to the number of bedrooms, the presence of nearby schools, children’s institutions, and so on.

According to the rental property market analysis for the last 6 months of 2019, one-bedroom apartments were the most popular option among potential tenants. This trend has a simple explanation: Dubai has a huge number of foreigners and young couples living and working in it, who don’t yet physically need large apartments with several bedrooms or luxury villas.

At the same time, relatively small studio apartments, even despite their affordability and compactness, are gradually becoming less popular. This trend is largely related to the general drop in real estate prices over the last 2 years. Now, even tenants with a limited budget can afford to rent a somewhat comfortable and spacious lodging. Besides, the difference between monthly prices on studios and one-bedroom apartments isn’t as substantial anymore.

Considering the location, the more popular and profitable are traditionally the central city districts:

Two-bedroom and three-bedroom apartments together make the second most popular option among tenants. In most cases, apartments with two and more bedrooms are rented by families with children. Such tenants consider the location of schools and hospitals the key priority.

Despite the popularity of city apartments, country villa rental in Dubai is still relevant. Throughout 2019, three-bedroom villas boasted the highest demand. Such houses were most frequently rented in Arabian Ranches, Town Square by NSHAMA, Villanova by Dubai Properties, Serenia The Palm and Meraas Cherrywoods.

Villas with two and three bedrooms are the most popular ones. Such houses are frequently selected by friends or colleagues that feel comfortable living together or families with kids.

It has to be noted that the rental profitable of a house with one or two bedrooms is virtually identical, while the payback on a three-bedroom villa is almost 12% higher compared to options with one or two bedrooms.