BEST Cash on Cash Returns in Dubai Marina
Some property investors evaluate properties based on rental yields. That’s the return on investment (ROI) based on the property’s value.
Yet, real estate can be leveraged. That’s one of the powers of real estate investment.
(Leverage is when an investor buys a property that’s valued at more than he or she actually invested in it. A property loan is one of the many options to do just that)
That’s why professional investors look for the returns they made on the cash they actually invested. Not on the value of the investment. That’s called Cash-on-Cash-Returns. It is shown as a percentage.
Obviously the higher it is the better the investment. Generally speaking, 8% - 10% is considered a good cash-on-cash return. In a good market. Less than that is acceptable in a down market.
Obviously, 15% or more is better. When the city/neighborhood has these kinds of properties. Now, let’s look at the BEST Cash on Cash returns in Dubai Marina.
Most units in the list have premium waterfront or water view locations
At this time, affordable properties enjoy the best cash-on-cash return
The most expensive unit on the list is the Studio flat in Marina Gate costing INR 2.8 cr (AED 1.5mil, EUR 336k). While the least expensive unit is a Studio in Marina Pearl costing as little as INR 81 lakh (AED 400k, EUR 96k).
Most importantly the NET cash-on-cash returns range between 6.16% for a 2-bedroom apartment in MAG 218 and 4.23% for the seafront Studio in Royal Oceanic. That’s after all expenses are paid. At this time, that’s better than bonds, savings, and most mutual funds / ETF.
But, out of all the properties, Zumurud Tower isn’t special at all. It earns a red signal. This means that reviews, location, views, and/or maintenance are bad. Not worthy of your investment. Even if the property is profitable and has a decent cash-on-cash return.
That’s because returns are only possible when tenants select the property. Which is harder when the property itself is not desirable.
Finally, the units in MAG 218, Studio One, and Marina Gate are safe to own. They earn a green signal because they are profitable even in a bad market. When rents drop and tenants flee to good locations and desirable properties.
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