What you can buy for 1.3 Mil AED (355K USD) in Abu Dhabi, and your passive income calculation...
I specialize in Off-Plan properties in Abu Dhabi.
There are two ways you can invest :
Buy an off-plan unit on installments (during construction) and Mortgage upon handover
Buy a Ready to move in Property and Mortgage it (Banks will cover upto 80% )
In a classic example in Reem Island, you can get :
Type: 1 bedroom
Size: 850 sqft
Age: 15-year-old Building
Price: 1,300,000 AED
Rental income: 85,000 AED
Service Charge: 11,000 AED (13 AED/sqft annually)
How much do you pay after mortgaging it ??
Expats can get upto 75% Mortgage amount till the maximum age of 60 years (For UAE nationals its 65 years).
You will still need about 25% cash handy for the down payment.
Total Payment Upfront
25% of Mortgage : 325,000 AED
Abu Dhabi municipality fee : 26,000 AED
Agency Fee ( Agent Commission) : 26,000 AED
Mortgage covered by Bank : 975,000 AED
Total Payment = 325,000 + 26,000 + 26,000= 377,000 AED.
You pay 377K AED upfront to buy this 1 bedroom.
Let's calculate Return on Investment (ROI )
Annual Rental Income: 85,000 AED
Annual Service Charge: 11,050 AED
Monthly Mortgage Payment on 4.5% Interest on 1,300,000 AED for 25 years: 5,420 AED/month
Annual Mortage Payment: 65,040 AED
Annual Earnings: 85,000 -11,050 -65,040 = 8,920 AED
Based on an average rent increase of 5% every year, the earnings start at 2% per year as per the calculations below....
2% Earning is based on the 377,000 AED Capital invested, it grows every year as rent increases!
After 25 years, earnings will be 73% plus per year, and you will fully own the Real Estate Asset.
Also important to note ***
The property value will have appreciated by 5.6 Mil in 30 years ( say 5% annual increase)
You make 4.31 Mil in Capital Appreciation upon selling...
i.e. 332% ROI
Property investment is a long-term game, and it provides you with passive income for decades ... invest 377K AED today to start generating your passive income stream.
Comment "INVEST" so I can share with you the current Resale properties in Abu Dhabi.
-Tavleen
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