Buying properties can be extremely lucrative and profitable, especially in a growing and dynamic market such as Abu Dhabi. As a major world financial and business hub, real estate prices have skyrocketed in recent years, and with the unprecedented growth expected to continue, prices are expected to remain high for the foreseeable future.

Real estate in Abu Dhabi is unique in that it has the tendency to draw in inexperienced investors, as our knowledge economy offers a very low barrier to entry into the real estate market. Novice and experienced investors alike stand to profit quite handsomely when investing and buying property in Abu Dhabi..

It is not without risk, however, and investors who are not careful can still stand to lose money even in a market as thriving as this one. These are the top three mistakes’ investors make when buying property in the Abu Dhabi real estate market.

Lack of Planning When Investing in Properties

Changes come to Abu Dhabi very quickly and investing here still requires very thorough research. Expats come from all over the world to live and work in the city, many not knowing exactly how long they will be staying, resulting in an unusually transient population. Buying property to serve this population can be lucrative, but it must be done correctly.

The city is constantly changing as well, with major construction projects frequently being announced while others are already underway and changing the landscape of the city. The city is known for rather complex and ever-changing zoning laws as well, and investors wishing to buy property need to plan for things like sustainability and other ordinances that must be followed.

It is crucial that investors have a solid plan in place before they begin investing and buying property in Abu Dhabi. The most successful investors choose a strategy, make a list of all the criteria they want in an investment property, and then do not purchase until a deal is found that meets every single item on their checklist.

Things like location, property size and property type are important, but also keep in mind that in addition to all of the other changes in the Abu Dhabi market, real estate is cyclical and will naturally ebb and flow to a certain degree, even in a market as thriving and lucrative as this one, so a certain amount of flexibility is still advisable.

Before buying property, investors must have an accurate idea of what rents are, what other comparable properties in the area have recently sold for, as well as data on things like taxes, demographics, average salaries and expenses in the area.

Being Financially Unprepared

The second biggest mistake made by investors in Abu Dhabi is not being financially prepared. Properties in Abu Dhabi tend to move very quickly, and an investor trying to buy property who cannot close on a loan quickly can often lose out on very good deals to better prepared investors who may get a lower offer accepted in exchange for a faster closing.

Before looking for properties and especially before putting in an offer, potential investors should have funds readily available by getting pre-approved from lenders or already having terms agreed upon with private business partners.

In addition to routine maintenance, taxes, landscaping, insurance and property management fees, landlords need to have a good idea of what they can expect as far as vacancy and turnover costs. Successful landlords know what these costs are before buying property as opposed to being surprised by them later.

These costs can be especially hard to estimate in the Abu Dhabi market as conditions change so fast, coupled with our population consisting of so many expats who may have their plans change suddenly with little notice.

Before looking for properties and especially before putting in an offer, potential investors should have funds readily available by getting pre-approved from lenders or already having terms agreed upon with private business partners.

Many landlords in the area have adopted a short term leasing model where they supply a fully furnished house, complete with furniture, to serve the more transient expat population. This can be, of course, an especially lucrative business model, but does come with extra costs that must be accounted for.

Not Understanding Real Estate in Abu Dhabi

Being aware of market trends is crucial in the Abu Dhabi real estate market. A savvy investor knows what the competition is doing and also knows what has and has not worked in the past.

Market research is crucial when analyzing potential deals. Abu Dhabi currently has an abundance of inexperienced real estate investors buying property and becoming first time landlords. As a result, many property owners lack the sophistication required to run an especially profitable business operation.

Simply by doing their due diligence with market research and being aware of current market conditions and trends, landlords, even first-time landlords, can get a huge leg up on their competition. By knowing what tenants are looking for in a residence, landlords can command a higher rent with inexpensive upgrades to their property.

In addition to the furnished unit trend, tenants put a premium on safety, cleanliness and modern amenities such as in unit laundry and community gathering areas.

All three of these problems can be addressed with access to reliable and accurate real time data about the Abu Dhabi real estate market. Such data has for a long time been difficult to come by due to a lack of standards in data collection techniques and practices.

Investors, landlords and property managers wishing to buy property now have the ability to radically upgrade their decision making and business acumen by having, for the first time, access to accurate, easy to understand and real time data about the Abu Dhabi market.

Quanta is a new platform that aggregates data from public and private sources through strategic partnerships and supplies it to its customers in the real estate industry.

With this data, the main problems that real estate investors face in Abu Dhabi can be addressed, leading to more profits for investors, and better real estate options for the public. Current market trends and comparable property expenses can now be studied with this data that will give its user a valuable inside edge into the market when buying property.