Wednesday, June 18, 2008

Best Real Estate Properties in Dubai

The real estate market in Dubai is rapidly expanding. This is because Dubai has grown as a hub of industry and globalization. A return of 30 % or more can be expected from the property market. There is no income tax or sales tax. This tax free lifestyle is attracting more foreign investors who either retire here or relocate with their families.

People of varied religions co-exist in peace there. It has a modern cosmopolitan culture unlike the other Arab regions. All these reasons together have contributed greatly to take the real estate market into new heights.

The most popular real estate and property projects here are listed below:

The walk

Jumeirah Beach Residence

Business Bay

The Executive Towers

Vision Tower

Bay Avenue

The Villa

The property market here is at an absolute peak now. This is the best time to procure a good property and settle there. In fact, the number of foreigners in this cosmopolitan city far outnumbers the number of natives.

Dubai seems very attractive to investors because it has a pleasant and sunny climate. It embraces different cultures. It is politically and economically stable. It is a haven for those who want to relocate to this nation or those who want to retire here, there is no income tax and no sales tax here. This makes it very attractive to many people. All the major companies and MNCs open a branch office there, as they want to have a share and carve a niche in this growing economy. The employees of these companies also like it.

http://www.aboutdubai.org

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Real Estate Wealth Building Through Master Leases

I was challenged by a student to illustrate how someone can produce income with real estate. This would of course be easy, however, the individual extending the challenge made it a little more difficult (but not much) by adding the requirement that my example would require that he not own the real estate himself. Dare I say that this is a piece of proverbial cake? Heres an easy way. Its called the Master Lease.

A master lease is a document that leases to the lessee (not the owner, shes the lessor) the right to possession of a property. For our example let's say it is an entire large warehouse. The lessee pays a more attractive price per-square-foot for the space than individual smaller space users would because the lessee is taking the entire facility and thereby simplifies the headaches and hassles of the owner (lessor).

The lessee in possession then sublets the space to a variety of individual smaller users at a higher per-square-foot price and thereby reaps the benefit of the spread between his cost and his higher rental rates received. Depending on how this type of relationship is negotiated and structured, this can produce a significant cash flow to the original lessee. This business model can be used with residential, commercial, storage, land, or any other real property. You could literally rent a small home (with the right to sublet) then rent it out at a higher rate and keep the difference. Yes there is the risk associated with the lease obligation for the lessee, however, if you are confident in your ability to sublet a property and manage the renters or tenants thereafter, then this technique can be very profitable.

I know of individuals who rent properties using long-term leases from out-of-state owners and make the majority of their income from subletting them. The out-of-state owners have their property leased, little headache and no management concerns. The lessee has the cash flow and sometimes heres a great add on, they have an option to buy the property at a specific time in the future and at a specified price. Under this scenario a lessee can increase the income of a property and control expenses such that the value of the property increases well over their option price. In this way the lessee literally builds their down payment over a few years and is able to finance 100% of their purchase price, which may be for our example only 70% of the then appraised price, if they choose to buy the property. If they choose not to buy, they can still do a simultaneous purchase and sale of the property to another buyer (at the appraised price) and earn the equity build up for themselves. We could go on forever, but thats enough for today.

Roger Beattie is a real estate broker, investor, owner and operator. He is also the owner of Middle Class Millionaires, an organization dedicated to helping regular folk get into real estate investment. Middle Class Millionaires has an excellent blog with investing articles and industry news.

http://www.middleclassmillionaires.com/blog

http://www.MiddleClassMillionaires.com

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