Rates of return in real estate

A fast-growing real estate market

With little return on rental investment in Europe, more and more French people are looking to invest in the Emirates, which offer more attractive rental yields. Emirates, which offer more attractive rental yields for both short and long-term long term. Rates of return in Dubai are among the highest in the world.

The rate of return is an indicator for assessing the financial platform of a real estate investment. investment. It measures the amount of profit for the amount invested. The formula for calculating it is the rental rate of return: ( Net profit / total investment) x100.

The rate of return is made up of total profit and total investment: Net profit corresponds to the income generated by the amount invested, i.e. the rental income from the apartments or villas. It also includes product sales or interest earned less investment-related expenses such as operating costs, condominium fees, taxes and interest paid. taxes and interest paid. Net income is therefore revenues minus expenses.

The total investment corresponds to the amount of the property purchased, i.e. the price of the property plus all costs associated with the purchase, such as agency fees, notary fees, exchange or transfer fees. transfer fees. If the property has been furnished or fitted out at the owner’s expense, these will be added to the amount of the total investment costs.

To obtain a more accurate estimate of a property’s profitability, we need to take into account the appreciation of its value, i.e. whether its price is rising or falling. i.e. whether its price is rising or falling. This is based on historical data, professional appraisals and and real estate market analyses. For value assessment, some people focus solely on the cash flow generated by the investment. This provides a more reliable basis.  

To calculate the rate of return including value appreciation: ( Net profit + Value appreciation value / total investment) x100.

Whether or not to add value appreciation depends on the investor’s strategic choices the investor.

For anyone wishing to invest in Dubai, being a real estate investment it is best to consider all aspects and therefore take into account value appreciation to obtain the most accurate profitability.

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