# How you can get ripped off in Dubai



## woodlands (Jan 13, 2010)

I must clarify that i am a big fan of Dubai but having been here 4 months believe that actively avoiding rip offs is necessary to thrive here. Trying to compile a list. 

Different people have different perspectives but if you feel there is a rip off/scam somewhere and it could potentially be avoided please add to the list. 

My personal favourite

1./ Never buy a property in Dubai: if the demand is buoyant, they will build more and reduce the value of your home. And if you own they will kill you with service charges that are arbitrary to say the least. In the end they can own your freeholds whenever they want.


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## MarcelDH (Jul 5, 2010)

woodlands said:


> I must clarify that i am a big fan of Dubai but having been here 4 months believe that actively avoiding rip offs is necessary to thrive here. Trying to compile a list.
> 
> Different people have different perspectives but if you feel there is a rip off/scam somewhere and it could potentially be avoided please add to the list.
> 
> ...


I had a nice one last week. I have only been here two weeks now and I had a taxi driver trying to make me believe that the 500 Dirham note in my hands was actually a 100 Dirham one and he did not have a problem giving me change for that...


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## Seabee (Jul 15, 2010)

Woodlands, that's a huge generalisation and as such is only partly true. Developers/developments differ enormously. Not just flippers have made money or have increased equity in their properties.

Like buying anywhere, whether you'v increased equity depends what you bought and when, whether you paid the right price for the right property, whether you did your reasearch. If you bought at the peak your property will be worth less than half what you paid. If you bought the right property at the right price up to about two years ago it will have increased in value. Like everywhere, you make or lose money when you buy.

Maintenance fees vary enormously, depending on the facities/landscaping/water features etc etc of the property - and buyers should take all that into account before they buy.

Example, I bought in 2005 and today my property is valued at more than I paid - and I've saved well over half a million dirhams in rent over the five years. I pay Dh8 per square foot for maintenance, with no complaints about the standards, plus Dh2 for the sinking fund. How is that a rip-off?

_"In the end they can own your freeholds whenever they want."_ Who can?


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## woodlands (Jan 13, 2010)

Is there some generalization, probably yes. Is it way off, not really. Question is if tommorrow, Emaar or the developer rachets up your service charges by 50% or more and does it successively over the years, you have no recourse. 

Its not just real estate, extends to other asset classes as well. Your property is worth more than in 2005 but to invest in this country you took a huge risk. A right decision and a right outcome are two very different things. To give you an idea, has your property risen more than in Manhattan. If not then your return is way lower than the risk you took. Just to give an example.




Seabee said:


> Woodlands, that's a huge generalisation and as such is only partly true. Developers/developments differ enormously. Not just flippers have made money or have increased equity in their properties.
> 
> Like buying anywhere, whether you'v increased equity depends what you bought and when, whether you paid the right price for the right property, whether you did your reasearch. If you bought at the peak your property will be worth less than half what you paid. If you bought the right property at the right price up to about two years ago it will have increased in value. Like everywhere, you make or lose money when you buy.
> 
> ...


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## Seabee (Jul 15, 2010)

Owners Associations are taking over the management of properties, then there's the Strata Law, RERA, the Land Department etc etc. If you check around you'll find that huge numbers of properties are not developed by Emaar or Nakheel but by smaller developers. All are different.

Woodlands, the developers are handing over, by law, the management to owners asociations, who are responsible for appointing the various maintenance companies in future and for setting maintenance fees.

_"Your property is worth more than in 2005 but to invest in this country you took a huge risk. A right decision and a right outcome are two very different things. To give you an idea, has your property risen more than in Manhattan. If not then your return is way lower than the risk you took"_
We didn't buy as an investment, nor is that everyone's reason for buying by any means. In our case we bought because we decided to move back here (after living here previously), got a property owner's residence visa, saved a huge amount on rent. Other people who are on employers sponsorship buy because they prefer to pay a mortgage than to pay rent and so that they have a home of their own.

Not everyone buys property simply to make a profit. With us, had we lost money we would have offset it against the rent we saved and our reasons for coming back to live here. 

Your Manhatten example isn't valid because we didn't buy here for a money making investment. For a simple financial return we invest in property in countries such as Australia (where we have our home), Singapore and the UK, all of which we know well, they have well-regulated markets and we know the property scene.


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## wandabug (Apr 22, 2010)

I bought 2 properties in Dubai before the prices went sky-high, rented one out and lived in the other for 3 years. I could have sold them 2 years ago for a huge profit but didn't, since then prices have dropped drastically but are still double what I paid. I have now rented out my second property and have taken a year off work to travel around se asia living off the 2 rental incomes. Even tho rents have dropped and I have to pay service charges I can still get good enough income that I do not have to work. I will keep both properties as long as they can give me an income and will sell when I need capital. Ripped off??? No I made a good investment and am very happy.


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## ralphrau (Dec 6, 2008)

*Timing is everything in Real Estate*



wandabug said:


> I bought 2 properties in Dubai before the prices went sky-high, rented one out and lived in the other for 3 years. I could have sold them 2 years ago for a huge profit but didn't, since then prices have dropped drastically but are still double what I paid. I have now rented out my second property and have taken a year off work to travel around se asia living off the 2 rental incomes. Even tho rents have dropped and I have to pay service charges I can still get good enough income that I do not have to work. I will keep both properties as long as they can give me an income and will sell when I need capital. Ripped off??? No I made a good investment and am very happy.



I "played" the market in Dubai and I am still comfortably above my cost.

I "played" with only one property at a time which was 80% complete at the time of my investment. Many who played with multiple properties have been burnt. Big risk -->Big return or Big loss.

Property markets can stay flat sometimes for 5-10 years. Then they can suddenly shoot up. A long term player should do the math of rent vs buy and take a call. In the real estate business timing is everything.

I recently met a US resident of Virginia whose house value is down 60% or more. People thought US investment was risk free being a "mature and stable" market.

No risk = No gain


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## Seabee (Jul 15, 2010)

The problem with the original post is that it says Dubai property is a rip off and a scam - and it contains inaccuracies.

What Woodlands really seems to have meant is that he doesn't think it's a good investment, and that's a very different thing.

A few of us have posted that we've made money, but a lot of others have lost plenty. It's all about the usual investment decisions - what you buy, where & when, and how much you pay.

There have been a few genuine rip offs/scams - developer taking the money and not building the property such as Lighthouse at Dubai Marina - but the vast majority of property deals have been genuine.


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