7 Key Questions to Ask When Buying a Secondary Home in Dubai

Buying a secondary home in Dubai is an attractive option for investors and residents looking for a vacation property, rental income or long-term investment. With a stable real estate market, attractive financing options, and evolving regulations, it’s important to ask the right questions to ensure a smooth purchase. Whether you are considering a high-end villa in Palm Jumeirah, a sleek apartment in Downtown Dubai, or a waterfront retreat in Dubai Marina, making an informed decision can make all the difference. Here are seven essential questions to consider when buying a secondary home in Dubai.

1. What Are the Eligibility Requirements for Purchasing a Secondary Home?

As an eligible buyer, you can purchase a secondary home in freehold areas such as Palm Jumeirah, Downtown Dubai, and Dubai Marina. These locations are open to both UAE residents and international buyers. However, it’s crucial to verify your eligibility as a non-resident or resident and understand the documentation needed for the transaction. Generally, non-residents can buy property without the need for a UAE residency visa, but obtaining one through property investment may provide additional benefits.

Additionally, buyers should ensure they work with a DLD (Dubai Land Department) registered real estate agent to ensure a legal and hassle-free transaction. Understanding ownership structures—freehold vs. leasehold—is also key to long-term investment success.

2. What Are the Total Costs Beyond the Purchase Price?

Aside from the property price, additional costs include the Dubai Land Department (DLD) fee, which is 4% of the property value, agent commissions (usually 2% of the purchase price), mortgage fees (if applicable), maintenance charges, and annual service fees. If buying off-plan, be aware of post-handover payment plans and any delays that could impact financial commitments.

Furthermore, homebuyers should consider:

• Mortgage processing fees 
• Oqood registration fees (for off-plan purchases)
• Conveyancing and legal fees
• Property insurance costs
• Annual community service fees, which vary based on location and amenities

Understanding these costs upfront ensures you avoid unexpected financial surprises and can make a sound investment decision.

3. Should I Buy Off-Plan or a Ready Property?

If you’re looking for immediate rental income or personal use, a ready property is ideal. These homes are move-in ready, and in high-demand areas, they can start generating returns immediately. However, they often require full upfront payment or mortgage financing.

On the other hand, off-plan properties—those still under construction—are often priced lower and come with flexible payment plans, making them appealing to long-term investors. However, there are inherent risks, such as project delays or potential deviations from initial designs.

To mitigate risks, check the developer’s track record, financial stability, and RERA (Real Estate Regulatory Agency) approvals before committing to an off-plan purchase.

4. What Rental Income Can I Expect?

If you plan to rent out your secondary home, understanding the rental yield and occupancy rates in the area is crucial. Popular locations like Dubai Marina and Jumeirah Village Circle (JVC) typically offer rental yields of 6-8%, making them attractive for investors.

Some key factors to consider include:

• Short-term vs. long-term rentals: Short-term rentals via Airbnb yield higher returns but require active management, whereas long-term leases offer stable income
• Occupancy rates in different seasons: Peak tourist seasons drive up short-term rental demand, especially in beachfront and city-center properties
• Future development plans: Upcoming infrastructure projects can impact rental demand and appreciation potential

Consulting with a real estate expert can provide insights into maximizing rental returns based on market trends.

5. What Are the Mortgage and Financing Options?

When purchasing a secondary home in Dubai, banks typically require a higher down payment compared to primary residences. For UAE residents, the minimum down payment is usually 20% of the property value for homes priced up to AED 5 million and 30% for properties above that threshold. Non-residents can also secure mortgages, with down payment requirements starting from 20%, though some banks may require higher upfront payments depending on the property and borrower profile.

Additional mortgage considerations include:

• Fixed vs. variable interest rates: Fixed rates provide stability, while variable rates may fluctuate with the market
• Mortgage tenure and eligibility: Loan terms typically range from 5 to 25 years, depending on the borrower’s financial profile
• Pre-approval benefits: Getting a mortgage pre-approved helps determine your budget and strengthens your negotiating position with sellers

It’s advisable to compare mortgage providers to secure the best interest rates and repayment terms before finalizing the purchase.

6. What Are the Community Fees and Maintenance Costs?

Service charges in Dubai vary by location and property type. These fees cover maintenance, security, and shared amenities like pools and gyms. Some upscale communities have higher service charges due to premium facilities, including concierge services, gated security, and private beach access.

Before purchasing, buyers should:

• Request a breakdown of service charges per square foot
• Confirm if additional fees apply for property upgrades or repairs
• Compare fees with similar properties in the area to ensure fair pricing

Planning ahead for these recurring expenses will ensure a seamless ownership experience.

7. What Are the Resale and Exit Strategies?

If you plan to sell the property in the future, consider factors such as market appreciation, demand trends, and resale restrictions from developers. Some key questions include:

• Is there a minimum holding period before resale?
• Does the area have a history of capital appreciation?
• Are there upcoming developments that might impact property value?

A well-researched exit strategy ensures you maximize returns when it’s time to sell or reinvest.

Conclusion

Purchasing a secondary home in Dubai can be a smart investment or a luxurious getaway. By considering factors such as eligibility, costs, rental potential, and resale strategies, you can make a well-informed decision. Whether you’re buying for personal use or rental income, working with a trusted real estate expert like Arabian Estates can help streamline the process.

Ready to explore your options? Contact us today for expert guidance on Dubai’s secondary home market. We’re here to help you make the right investment choice!