UAE

Property Times – June 2015

Investors

I have been lucky in my professional life to have met and worked with some very successful investors. While I have found each to be different in personality, style and even investment philosophy, there are some attitudes, traits and perspectives that are shared among the most successful investors I have had the privilege to have met.  Thinking  back  to  many  interesting discussions I have had with these people… some  of  whom  are  my  most  loyal  and respected  clients…  there  are  several statements  that  we  often  hear  in  our everyday professional lives which I have not heard from this group of achievers. This is what separates them from the rest.

“I hate (insert anything) … “

I have rarely heard my successful investors project a negative stance about anything in their professional life. This is not to say that they support every philosophy, concept or idea and they will also not accept an occurrence which is contrary to what they think should have happened. But instead of expressing such a negative emotion as hate, they continue to think positively and seek positives from a situation or take a positive approach to remedying that which they do not agree with. As a result, the dialogue is always positive, creating an environment positivity, proactivity and energy directed towards progress. Taking this approach also helps to create a pleasant, purposeful and fruitful environment in which to work and helps to maintain or even build esteem and confidence among those that can contribute to achieving exceptional results. It promotes objectivity, focus and decisiveness.

“That’s not fair”

The world is not a fair place never has been and never will be, and successful investors understand, embrace and accept that. This allows them to be immune from the negativity that can arise when an individual feels hard done by or cheated.  It  also allows them to plan, create contingencies and  maintain  a  positive  attitude  when a  seemingly  unfair  occurrence  occurs resulting in a greater chance to respond to a situation rapidly and appropriately rather than dwelling on the fact that an occurrence was “unfair”.

“That’s not how it’s done here”

An open mind is essential to develop, progress and eventual success. Successful investors will embrace new ideas and innovation.  To not realise that progress is created from ingredients consisting of past experience and innovation is to rely too heavily on tried and true practices that gradually lose relevance over time. This form of decay has destroyed entrepreneurs, global corporations and even whole economies and societies. With globalization, the world has become a much smaller place. To not embrace, improve and implement world’s best practice and only holding close what you are comfortable is the biggest threat to creating continued success.

“I am a self-made man”

Nobody has ever made it on their own. It was once thought that the iconic, independent, totally  self-sufficient,  unchallengeable, silent-type, hard-nosed entrepreneur who left  metaphorical  bodies  in  his  wake  as he  doggedly  climbed  the  mountain  of success was the role model that should be emulated by all who craved achievement. Many have tried and they all failed. No-one can achieve success on their own.  As a matter of fact, the most successful people I have met have surrounded themselves with successful people and ensured that those people shared in their success. They seek opinions, listen carefully, discuss intelligently, consider alternatives and have their decisions reviewed. They reward those who contribute to their achievements and help them succeed as well for this is also a valuable way to learn and build momentum at the same time.

“That’s impossible”

Successful  people  know  that  nothing  is impossible and hold the belief that every problem  has  a  solution,  some  of  which just haven’t been thought of yet. Anything is possible as long as there is a willingness to  explore,  question  and  challenge  and imagination  is  intensely  applied  and ingenuity  is  rewarded.  Achievers do not complain about obstacles. They embrace them so as to gain an understanding as to how they can be overcome for they truly believe that nothing is insurmountable. Negative words like “can’t,”  “won’t,” and “impossible” are never heard from the mouths of successful individuals. They know complaining will not help them, but actually doing something about the issue at hand will.

“I could have”

Could have… would have … should have. We have all heard these expressions of retrospective folly. Experts in hindsight have no place at the table of successful people and regret is a fruitless and pointless emotion. Successful people thrive on opportunities not lost opportunities. If they cannot make one opportunity work to their satisfaction, they move on and find another opportunity. Regret simply slows down the effective pursuit of the next great opportunity.

“I have no choice”

Victims have no choice. Successful investors create alternative solutions to every problem and will carefully consider all of them. In this way, successful investors are never victims for they create an environment filled with choices. Then it’s just a matter of deciding which choice represents the best way forward. Successful investors know how to create opportunities where normal people think none seemingly exist.  Successful investors believe that opportunities always will exist, but they are hidden in the recesses of our individual and collective imaginations.  The reason why they are successful is largely due to their determination and ability to extract those opportunities, while others are stagnating in the belief that they don’t exist!!

Gulf News Freehold – Ask The Agent

mohanad_professional

I own an apartment in Dubai. I got a new tenant and increased its rent but I cannot raise it further according to the rental index. The market seems to have peaked. Should I sell it?

Yes, there is price correction, but we are far removed from experiencing a long-term trend. Looking over the next five years, we expect the market to achieve an average price growth of around 7%. Bear in mind that we are talking averages here and popular areas have a habit of outperforming the average. It really comes down to alternatives. If you have identified an alternative investment to give you a better income stream and capital return than what you expect to receive in five years from your apartment, then the right decision may be to sell. However, if you have not, hold on to the property. You will continue to receive at least a 5-7% net rental return and achieve around 7% per annum capital growth in the future.

Why is it that the rents of not so new apartments in some areas remain high? The rates in these areas did not fall as much when recession struck and when rents increased, their rents also increased fast. How come?

The value of a particular location is usually derived from the levels of pleasure, lifestyle convenience, security, harmony, future economic value or even status that can be derived from the property. Whether it is a spectacular view (sea, lake and others) or proximity to public transport, business districts, entertainment, dining, schools or hospitals, the perceived benefits that a location may bring to a prospective tenant can account for up to 90%, Areas close to the beach and entertainment venues as well as properties located close to/within. Downtown Dubai or the business district will command a location premium. Most potential tenants consider a view as a key factor for their house to be enjoyed.

I think that l am paying excessive service charges. Getting access to information that might prove my suspicions is difficult. Is my OA obliged to provide me with information?

Attending owners association (OA) meetings and requesting details on the service charges would be the logical place to start and they are obliged to address your query. Remember, the purpose of the OA is to manage, operate and maintain the common areas, virtually all of the “owner shared” elements of the building. They do this by appointing contractors with the expertise to carry out the required tasks and set a service charge that all owners must pay to cover the cost of the contractor services. The OA is a “not for profit” business entity in its own right with the powers to operate a bank account, sue (or be sued), purchase, own and dispose of assets and enter legally binding agreements. You can request and view the financial statements of the association to ensure the charges you are paying are justified and correct.

Reports are saying that the market has slowed and prices are correcting. Is it a good time to buy?

Picking the exact timing is difficult. Start your property search immediately as this kind of investment requires the same approach regardless of the state of the market. Know what you can afford. If you have the cash, pay for it outright, but you can always take a mortgage. Think carefully about location, surrounding infrastructure, construction quality, developer reputation and building amenities. If you have close access to the Metro, even better. Also consider the effectivity of the OA, service charges and the quality of maintenance services as these affect the long-term value of your investment. Be purposeful, persistent, patient and pragmatic in your approach and you are well on the way to making a very sound investment decision. However, if you decide to rent, there are also great deals. With robust tenant protection legislation and a rental index to limit your exposure to increases, your rights will be recognised.

The property market seems to swing in favour of buyers and investors. Where do you believe the best investment opportunities are likely to appear?

Definitely in, the affordable segment of the market. We are encouraging clients to invest in this segment as it has great opportunities.

Excellent examples, of high performing yet affordable developments are the Skycourts and Queue Point communities in Dubailand. These have seen excellent capital growth.

Demand for this type of affordable housing will continue to grow and we expect other developments that are located close to the two communities to benefit as well, especially as Dubai’s population swells in the run-up to the Expo and the demand for affordable housing increases.

A smart move would be to invest in an apartment and retain ownership for at least five years as I am confident that you will benefit from superior capital growth and enjoy very healthy net annual rental return in the meantime.

In addition, consider looking at the apartments in Sarah Ajmal and Windsor Residence. They are all expected to perform very well as the demand for affordable properties continues to grow.

Of course, there are the established areas such as Remraam, International City, Discovery Gardens and International Media Production Zone, while the Town Square project is one to watch out for.