Why Buy Instead of Rent in Abu Dhabi - Rent property in Abu Dhabi - Crompton Partners Abu Dhabi - PowerPoint PPT Presentation

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Why Buy Instead of Rent in Abu Dhabi - Rent property in Abu Dhabi - Crompton Partners Abu Dhabi

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  1. Why Buy Instead of Rent in Abu Dhabi - Rent property in Abu Dhabi - Crompton Partners AbuDhabi Best Real Estate Company in Abu Dhabi- Home ownership rates in Europe vary from Germany at 53% all the way to Romania at 96% (the USA is 65% and India is 86%). Rent property in Abu Dhabi- Most of the world owns their own home and they dothat because it makes financial sense, even here in the UAE, and here is why. This is a brief summary, for the full guide please visit our website libraryhere. Reason One – Inflation ProofInvestment Abu Dhabi Real Estate Agents- Inflation in the third quarter of 2014 in the UAE was 4%, this means very roughly that things (food, fuel, rent, clothes etc) appreciated in cost by4%.

  2. Abu Dhabi Estate Agents- Inflation means that if you keep your money in a bank account at 1% interest you’re actually losing 3% of that money per year in real terms, as everything else is going up in price but your money stays almost the same. The value of yourmoney depreciates. Buy villas Abu Dhabi- When you put your money in an asset that also appreciates along with inflation then at least you don’t lose money. Very few banks offer anywhere near 4% interest, so investing in an asset makessense. Reason Two – CapitalAppreciation Real Estate Companies in Abu Dhabi- Let us take a real example, a three bedroom apartment on Raha Beach, Al Muneera in Abu Dhabi is about 190,000 to rent and 3.2m to buy. When you buy a home with 3.2m of your own money and the home appreciates along with inflation by 4% per year then you make 4% on your money. Buy apartment Abu Dhabi- If you buy a home worth 3.2m with just 800k (which is the minimum 25% deposit required) and the other 2.6m of debt, and then your home appreciates by 4%, you a get 16% return on your outlay of 800K. Sounds like a trick? It isn’t.

  3. Real Estate Agents in Abu Dhabi- The asset is worth 3.2m – an increase of 4% is 128k. Now whether you own the house outright or you have borrowed to finance it that 128k is added to the equity (the value of the house less debt owed to the bank) in the house, the bank doesn’t get any of it. Your repayment stays the same and the amount owed tothe bank isn’t adjusted. This is called leverage. Over five years it would add around 700k to the equity in yourproperty. Warning – When the market goes down leverage works the other way. Your bank doesn’t take any gains when your house appreciates but also won’t take losses when it falls in value. View our Abu Dhabi Sales ListingsHere Reason Three – Paying downEquity Abu Dhabi Real Estate Company- When you rent your money goes straight into your landlord’s pocket and you get to stay in his property for anotheryear. Buy villa Saadiyat island- When the property is yours you either own it outright (so no rent at all) or more likely you have finance on it. The repayment on a 2.6m loan over 25 years is about 152k peryear.

  4. Buy Raha beach apartments- That is 38k less than the amount to rent the same unit. The best thing about this however is not just the 38k saving per year (but see the Warning below) but the fact that your 152k repayment now goes to paying off your mortgage (adding to your property’sequity). Buy Saadiyat island property- Now initially not a lot of your repayment goes to paying down the equity. In year one the amount left outstanding on your mortgage only decreases by about 57k but by year 5 this will go up to67K.

  5. Raha beach apartments for sale- The rest is used to pay back the interest to the bank and banks tend to want you to pay most of this interest at the beginning of yourmortgage. Buy property Reem island- Over Five years you’d pay off around 300k of debt and 460K towards interestrepayments. Warning: You need to add to this the hidden cost of service charges on the building, on a unit like this they would be around 20k per year, 100K over fiveyears. Reason Four – RentInsulation Buy property in Abu Dhabi- According to Jones Laing LaSalle (now just JLL) rents in Abu Dhabi over the last two years saw 20-25% increases, and according to Colliers Abu Dhabi is facing a housing shortage of over 50,000 units (that is 20% of totalsupply). Property for sale in Abu Dhabi- Rents are not going down in Abu Dhabi (unlike Dubai) any time soon. If you own your own home your rent is the amount you’re repaying to your bank every month, and with a fixed mortgage that amount doesn’t change, no-matter what happens to rent and propertyprices. Reason Five – Pure FinancialSense Buy apartment in Abu Dhabi- So assuming that everything works as it should your property will appreciateby700KbyCapitalAppreciationandyouwillpayoff300kof debt.Deduct 460k

  6. of interest and 100K of service fees and you come out with 440k positive return, over 50% on your 800k investment and you haven’t paid anyrent. Buy Apartment Abu Dhabi- If your rent is 190k per year over five years that is 950k, and that is assuming no rent rises. The difference between buying and renting is around 1.4m dirhams, and even if your home doesn’t appreciate in value a single fil you still come out ahead by700k. This is a brief summary, for the full guide please visit our website library here, or call 800 CPEA (2732) to speak to one of ouragents. Contact our Sales Manager Cristy for additional information or if you would like to discuss buying in Abu Dhabi inperson: cristy@cpestateagents.com Call – +971 508004388