Buying properties and putting the same up for rent or lease is a profitable investment. However, it is one out of the many investment opportunities with high ROI in Dubai. Starting a business, investing in cryptocurrencies and investing in mutual funds are other ways.
Investing in Dubai: What You Must Know
The investor’s guide in Dubai includes considering the risks associated with the business, finding out how much capital is required and diversifying your portfolio. Starting and growing your business will be a lot easier if you know the investment mistakes to avoid in Dubai.
Dubai has become a favourite destination for investors because of the long-standing history of a thriving economy. The ease of doing business, a level playing ground for everyone and an array of investment options make it the best city.
Where to Put Your Money in Dubai
Stocks, mutual funds, real estate and cryptocurrencies come tops on the list of investment opportunities with high ROI in Dubai.
Find out how each of these can make a worthwhile return on investment.
1. Real Estate Development & Investment
A capital of AED 1 Million should get you started with investing in Dubai’s real estate market. This is a profitable investment for these reasons:
- Liquid Market: the real estate industry in Dubai is highly liquid, thus, indicating the availability of enough cash in the market. You can easily put up a property for sale and it’d be gone in a little while.
- Innovation-Driven Economy: Dubai consistently strives to be the best city in the world. For this reason, being creative and strategic will help you benefit from innovations that will attract more investors to different industries, including real estate.
- Growing Population: besides births, Dubai has a lot of people (tourists and migrants) coming into the city. This growing population needs a place to stay, a place to do business and recreational places. Investing in properties that cover these needs is an investment in the right direction.
2. Invest in REITs
For some investors, the higher capital required to get an investment visa and get started with buying property in Dubai might be expensive.
What to do? Invest in the REITs. Real Estate Investment Trusts (REITs) have a lower barrier to entry because you’re investing in shares and not the actual properties.
Choosing the best investment tools, deciding on the duration (short-term or long-term) and analyzing the risks will help you choose the best REITs.
On the brighter side, REITs allow you to buy shares and benefit from the value when the price spikes. You’ll also earn dividends.
3. Put Your Money in the Stock Market
Public companies in Dubai offer another array of opportunities for you. Think the companies have a chance at making major moves in the future and these would reflect on the valuation? Go ahead and buy the stocks and hold them for as long as possible.
However, it’s also recommended to diversify your portfolio across different companies so you don’t lose much if one company doesn’t meet expectations. Understand the trends and fundamentals and be sure to research the companies before scooping up their stocks.
4. Invest in Cryptocurrencies
Cryptographic currencies have become a force to reckon with in the global financial system, with millions of transactions made daily.
While some cities have banned these currencies, Dubai is one city that is crypto-friendly. So, if you’re looking for one where the regulations are not so tight and you get to pay little or no tax; Dubai is the place to be.
You can comfortably trade from your home, office or leisure park. Rest assured that no one is interested in coming to knock on your door to put the cuffs on you.
5. Invest in ETFs
Financial markets like Forex and crypto can be lucrative and risky at the same time. For some investors, it is all about doing in-depth research and speculating on the potential outcomes of such.
However, some would prefer to take the easier way, by leveraging on ETFs. These can be profitable in the following ways:
- When investing in ETFs, you’re speculating on the performance of a specific market sector.
- ETFs are tax-efficient, meaning that you get to save some money on taxes.
- You’d be able to trade these ETFs on a single exchange, the same way you trade currency pairs.
- You can leverage ETFs to invest in a variety of markets, including but not limited to real estate, large corporations and precious metals.
Keep in mind that ETFs have risks, such as fluctuations, depending on the trends in the asset you’re holding.
6. Invest in Dubai’s Bond Market
Bonds are one of the low-risk and reliable investment opportunities in Dubai to use for preserving your capital and making some money on the side. In Dubai, the National Bonds, under the control of the Dubai Bonds Company, can be an investment opportunity for investors.
Besides the annual interest earned on the capital, you’re also assured of risk-free investment, as it is regulated by the government.
7. Consider Mutual Funds for Risk-Free Returns
Most of the investment options mentioned so far come with some risks; some low, others high. What if you’re looking to reduce the risks to the minimum and make your returns with ease? That is where mutual funds come in.
Mutual funds are funds or huge amounts of money pooled by a group of investors with a “mutual interest,” such as making profits.
Besides being collated, these funds are further put to good use to enable the investors or funders to earn some profits. These funds are disbursed across different income-making channels, such as issuing loans and investing in the money market.
With the help of professional managers, these monies can also be used to invest in securities, equities and bonds.
The benefits of using a mutual fund include having little or no interface with what the funds are used for, and not necessarily having the know-how of trading the financial market.
Concluding Thoughts
The UAE is home to tourists, business people and investors. The real estate market has been on a steady spike and the predictions for coming years still position it for more uptrends.
If you don’t understand this market, opt for other investment opportunities in Dubai, such as government-issued bonds, ETFs, trading cryptocurrencies, investing in mutual funds or buying stocks.
Consult a professional to help you choose the best investment instrument and guide you further on how to maximize the opportunities in this Dubai market.
