Investment in Serviced Hotel Apartment- Things to Consider

The new regulation, issued by Dubai’s Department of Tourism & Commerce Marketing (DTCM), allows homeowners to apply for holiday home license without having to commission a third party entity. Certainly, this framework brings more transparency within the sector and gives a welcome sign to Dubai service apartment industry. Investing in the serviced apartment gives potential real estate buyers an opportunity to be both less impetuous than residential properties and offer a greater yield with the comforts of home in luxurious settings. Moreover, if we consider Dubai’s tourism sector growth forecast then high-end hotel apartments will win out over the conventional property with inbound visitor numbers to the emirate set to increase to 20 million by 2020, as Dubai looks to achieve a compound annual growth rate of around 7-9 per cent in both leisure and business visitors in the next few years. Dubai's magnetism as a year-round destination would also apprehend that an investment property could be occupied for a significant percentage of the year.

Comprehend how an investment in a service apartment is a good idea.

So what are serviced apartments?

A serviced apartment is a furnished accommodation which gives an expedient and lucrative option for vacation and frequent business travellers with seclusion.  It provides more of a home away from home feeling and could be rented on a daily, weekly, monthly or annual basis. This resembles apartment-style living with ancillary facilities such as washer/dryers, kitchen gears, and extra living space; it can be with a wide range of housing selections from a studio room to one and two-bedroom apartments or even three bedrooms. With the serviced apartment investors had assurance that if they decide to pick for the rental, rather than the residence, a rental pool route is available. This means that all management, reservations, and maintenance are taken care of by the hotel or management company.

Consider before investing

Investing in real estate has been a traditionally lucrative investment option but as always said prudent research and analysis will pay off.  Know your market and study the industry where you want to invest. Explore the opportunities to leverage your investments for better returns. Consulting experts can pay you well and help to invest in the right place which ensures capital appreciation in the long-term. Before investing, it’s very crucial to do proper due diligence, know about the location, know about the builder, analysis if it is a safe purchase. Conveniences and allied amenities are one of the key players in the serviced or holiday home as it attracts the visitors and helps you to capitalize your investment with high potential returns. So tick the right boxes to gain the maximal out of your money.

Benefits of Investment

• Serviced hotel apartment gives investors a remarkable opportunity to enjoy ownership with less effort as it is well-managed by the hotel or the management company. 
  
• With the investment in a service apartment, you get access to amenities of that place and get a free stay to spend your holidays as per the hotel terms. 
  
• It’s easy to manage -when you buy a service apartment everything from marketing to maintenance is a part of the package. You don’t need to concern for rentals, the hotel management does that. 
  
• Attractive ROI- Investment in a service apartment gives an extremely attractive proposition for investors 
  

Mortgage Facility on Serviced apartment

If you are planning to buy well managed and reputed service apartment in Dubai, then finance should not be a concern. Today with the gaining popularity, banks are lending on such dwellings. The lending process is somewhat similar to ready residential mortgage facility. Banks are funding up to 75 percent LTV on the market price with the prevailing lending rates. Certainly, the bank will be doing due diligence to identify the applicant eligibility for a loan to value. So, if you are buying the service apartment for Dh 2 million, you should have minimum 25 per cent reserve down payment amount AED 500,000, if it’s your first mortgage in the UAE, along with this you should have extra savings to guard miscellaneous cost which includes transfer fee, title-deed cost, mortgage registration charges at the Dubai land department and the bank cost which includes bank processing fee, valuation fee, life and property insurance cost.

It’s true, no investment is free from peril however, for people considering buying a hotel service apartment could offer just the right balance between abridged risk and impending growth over the years. Cayan Cantara by Rotana, Palace Residences by Address Hotels+ Resorts at Dubai Creek Harbour. The Rove at The Walk by Emaar are some of the current investment product which can be considered. 

Investment in Serviced Hotel Apartment- Things to Consider

The new regulation, issued by Dubai’s Department of Tourism & Commerce Marketing (DTCM), allows homeowners to apply for holiday home li