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Ask the property experts

Freehold Monthly  www.gulfnews.com

Every month we invite you to have your property questions answered by an expert. This month Jane Irvine tackles the task.

Q I’ve purchased an apartment on Al Reem Island and am awaiting handover shortly. What should I do to prepare for the handover process?

    *  Jane Irvine     * Image Credit: Ahmed Kutty

* Jane Irvine * Image Credit: Ahmed Kutty

Ensure that you understand the costs involved so that you can prepare financially – for example, do you have to pay some of the service charges and utilities upfront? Are there any deposits to be paid? How much will it cost to have a property inspected for snags? Are you a landlord planning to use property management services and considering furnishing the apartment for rental?

If you are going to become a landlord and rent the property to a tenant, then contact a professional licensed real estate agency to discuss leasing and property management services and fees. If you are going to move into the property, ensure that you have given the required notice to vacate if you are leaving a current rental property.

When you receive your notice from the developer, ensure your viewing appointment gives you adequate time to thoroughly inspect the property for snags so that any necessary work can be recorded and agreed.

If you are using a mortgage, check with the financial institution whether it is ready to make the final payments to the developer and that all agreements are in place.

Ensure the dates you have been given are for the actual handover and not ‘pre-handover snagging’ (i.e. defect inspection) so that you know when to expect the keys and that both the building owner and the master developer have a coordinated handover process – that is, one approved by both parties.

Q My husband and I have bought a unit in one of Abu Dhabi’s investment zones, but we’re now living overseas. Is it easy to have leasing handled by a property management company? What should we watch out for when choosinga property management provider?

Overseas property investors should have no problem. Choose an experienced, established and reputable company and assess the company as if you were a prospective tenant as well as a landlord. By doing this you will be more comfortable with the kind of tenants that they are likely to attract and introduce to your property.

Ensure that the company is easily contactable and has systems in place to enable you to view the status of your unit online – in this way you will feel less removed from your investment.

Q As a unit owner, am I entitled to do a snagging/inspection report upon handover of a new property? What should I look out for? What are the advantages of using a professional surveyor to do this?

A proper inspection for snags is highly recommended, as this is your chance to ensure that your property is delivered to you as it should be. It will also help to determine that you are making the final payment on a property that matches your sales and purchase agreement, that it is clean and defect-free and that you are receiving the number of square feet that you have paid for.

Most of us would only be able to inspect a property visually, so employing a professional company will ensure that your unit is professionally measured and that plumbing, electrical and mechanical areas are also inspected. A professional snagging company will also provide you with a well-prepared document, including photographs of snags, to submit to your developer, while some will also handle the communication with your developer until snags are resolved.

Q I’m an expatriate based in Abu Dhabi and I’m thinking of purchasing an apartment at Al Raha Beach or Al Reem Island on the resale market in the next 18 months or so. Is it advisable to buy now, or should I wait?

Oh, to have that elusive crystal ball! Professional consensus on the matter is that prices are at a low right now as potential buyers are waiting for the first handovers on these projects to begin, and investors who are having difficulty making the final payment(s) are listing their properties for sale.

A common trend when an off-plan development is completed is that prices begin to stabilise and creep up as occupiers move in and the community becomes more established. This normally corresponds with the initial launch of retail and restaurant facilities in and around the project which adds obvious benefits.

However, we are in very uncommon times so this pattern may take longer. I believe we will also see a ‘move to quality’ from existing residents who will choose to live in new homes, either to take advantage of the benefits of homeownership or simply to remain as tenants but with access to superior facilities and parking. My advice would always be to do the sums and if the investment works for you and saves you rental moneys or gives you a good yield which is higher than your current investments then it is worth looking at today. The potential for capital growth is then the icing on the cake.

QI’ve read that rental yields are likely to be better in Abu Dhabi’s upcoming communities than those in Dubai. Is this true? What about capital appreciation?

It is virtually impossible to compare all the communities across the two emirates. However, the fundamentals of investing in property in Abu Dhabi are still strong – the bottom line is that more quality real estate is needed to provide accommodation to real people in real jobs. Many companies are expanding and/or basing themselves for the first time in the capital and the demand for suitable housing is growing. Put those basic economic foundations together with Abu Dhabi’s commitment to cultural, sporting and retail ‘firsts’ and I believe that in the mid to longer term, strong rental yields and steady capital growth from current prices is likely.

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