Investing in branded residence scheme apartments can be enticing, but it's crucial to approach with caution and scrutinize the contract fine print to avoid unforeseen complications. Yearly recurring fees can be substantial and may increase over time, impacting the long-term affordability of the investment. The longevity of the brand's presence in the building is another critical factor; if the brand withdraws, the property's value and appeal might plummet. Additionally, restrictions on short-term rentals like Airbnb can limit your income potential and flexibility. Thoroughly understanding these aspects before committing can prevent costly surprises and ensure a sound investment decision. ''Demand for branded residences remains strong amid Dubai property boom'' https://lnkd.in/dxFp4e5t
Well said Cecilia Reinaldo I'd like to add 2 points: 1. it is crucial to establish transparent rules and guidlines by related authorities regarding branded residencies. Standarize type of agreements which address the obligations and rights of the developer, owner association, the brand, and investor . No fine lines should be in place and encourage full transparency. 2. While looking at the short term rental scheme income from the investor's side , there should be careful approach from developers/Owner Association/ building management's side in the medium and long term to assess on operational and infrastructure impact and costs, which eventually will affect the value of the asset and consequently operational expenses paid by the investor/buyer.
Stephen Fairhall
4mo
Many branded residences offer a fixed return, which might sound appealing at the beginning but often it's pegged to the original sale price, so when you try to sell it don't expect much capital appreciation as the next buyer will get their return based on the original price not the current price!
Carlos Sousa
4mo
I agree!
Ahmed Shehab
4mo
Good point!
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4moReal estate is not just an investment; it serves as a home for end users, which is its original purpose. We cannot overlook the significant portion of buyers who purchase properties as their primary residence, without concern for capital appreciation or rental income. While I agree with some points from your post, such as the potential risks if a branded entity cancels its agreement with a developer, I believe that the issues surrounding branded residences will become clearer and more regulated within the next 5-10 years. Therefore, it is prudent to wait and see how the market evolves before forming a definitive opinion on branded residences.