Day 2
Lessons 1
Investments for regular passive income
Generate a secure, no-risk passive income by investing in ready-to-rent real estate in Dubai.
Enjoy a high annual return on your investments: 8-9% per year.

Ideal investment for:
Those who prefer to protect their capital while still earning a steady monthly income.
How to choose real estate objects for passive income:
What are the classes?
The rental real estate market is divided into classes: "A", "B", "C" to "D".
  • "A" class - this is premium, top real estate
  • "B" class - this is good real estate, but it is not considered premium
  • "C" class - these are residential areas where ordinary people live, sleep, work and study.
  • "D" class - this is where you can be killed.

There is no "D" class in the Emirates. As people are immediately deported for violations. And if a person does not have money to pay for rent - no one will help you, will not provide social housing, will not provide benefits and you just go home.

When a crisis occurs, "A" shifts to "B", "B" to "C", "C" - leaves the country.

Therefore, we initially target the "C" class, which is the most in demand. It is in demand now and will be in demand. And with the growth of the market, people will come, settle down, and during the crisis people will move.

That is, for us, good quality residential areas bring 90% occupancy, thanks to this logic.
If you look at market statistics, then areas near the water can jump plus or minus 30% per year, but here there is a stable percentage of growth per year.
At Independent, we advocate for short-term (monthly) apartment rentals.
Reasons for choosing short-term over long-term (yearly) rentals:
  • Security - With long-term contracts, if a tenant fails to pay, eviction is not immediate. It may even require a year-long court battle before you regain access to your property. We strive to engage tenants with stable employment, long-term residency in the country, and strong family values. However, no one is protected against sudden job loss and potential refusal to vacate or pay.
  • Property Condition - Short-term rentals allow us to frequently monitor for any damage and deduct repair costs from the deposit. With yearly rentals, tenants leave a 10% deposit, but damage to the apartment may exceed this amount if not regularly inspected.
  • Rental Increases - In long-term rentals, if the market value increases, we are limited to raising the rent by only 5%. With short-term rentals, we can adjust the rent in line with the current market value.
Author technology of apartment selection by Alexey Miroshnichenko, based on 13 years of experience:
First, it's important to choose the right districts.
Usually these are districts where the infrastructure has been around for a long time, stable growth for 2 years, class "C".

In which districts we recommend buying apartments:
  • Jumeirah Village Circle
  • Dubai Creek Harbour
  • Arjan
  • Dubai Sports City
  • Discovery Gardens
Read more in Day 1: Lesson 4

They consistently provide a growth of + 5%.
After choosing a district, it is important for you to properly select a house and apartment.

How to choose secondary real estate objects?
Calculate the ROI of the apartment. For this, we look at the selling price of the apartment, we look at the highest rental price of the apartment. Then the rental price minus property taxes, management, all expenses are divided by the cost of the apartment. If we get there above 8%, this is real estate that suits us.

Choosing a house:
  • Buildings no older than 5 years
  • We analyze the management company that sits at the reception
  • Take a look at the exterior, smell in the building
  • We check the cleaning of swimming pools, parking lots
  • We analyze the property tax and service fee
  • Availability of a gym, swimming pool, playground, SPA

Choosing an apartment:
  • Better to take 1 bedroom than a studio
  • Furniture and appliances were in good condition
  • The view doesn't matter
For secondary real estate, developers do not play a big influence.
Property purchase process :
1. Initiate with a 10% deposit for a memorandum
The first step involves securing 10% of the property price as a deposit. This serves to demonstrate your commitment and readiness to proceed with the property acquisition.

The deposit will be held with us and retained until all final settlements are concluded and the transaction is officially registered with the Land Department.

This arrangement provides assurance that your deposit will be returned should the deal fall through on the seller's end. However, should the transaction fail due to your actions, the deposit will be transferred to the seller as a form of compensation.

The deposit can be made in 4 ways:
  1. Payment to the company in Dubai
  2. Cheque
  3. Cash in Dubai
  4. Payment in cryptocurrency (USDT)

To sign the contract, we need:
  1. Passport
  2. ID (if available)
  3. E-mail
  4. Phone number

At this stage, our agency signs with you the agreement of intention to buy real estate.
Contact B with the buyer and our company:
2. Securing the No Objection Certificate (NOC) from the developer, which is a requisite for transaction registration at the Dubai Land Department
The No Objection Certificate (NOC) is a formal acknowledgment from the developer, ensuring that the seller has no outstanding debts. The issuance of this certificate, allowing property sale, can span from a day to a couple of weeks, depending on the particular construction firm.

Once this certificate is obtained by the property seller, the property you're purchasing can then be officially transferred to your name.
3. Finalizing the Purchase and Sale Agreement, encompassing all deal specifics
The process of acquiring and transferring real estate is made simple with the official state online portal. The agreement is sent to your email for signing using an electronic signature.
In the UAE, you don't need a notary to certify real estate transactions - a simple written form will do.

The real estate purchase and sale contract should include:
  • details of the property for sale,
  • the price of the property,
  • any additional costs related to the transaction (like agent commission, developer payments, Land Department registration fee, reimbursement to the seller of pre-paid service costs, etc.),
  • the timeframe for completing the transaction,
  • terms and procedure for payments,
  • what happens if the contract conditions aren't met.

Before you sign, you can check that these points are covered in the contract.
MOU - final sale purchase contract:
4. Registration of real estate in the name of the new owner in the Land Department. At the time of registration, the deal is also settled
The Dubai Land Department maintains an electronic real estate registry. When you and the seller apply to register the transfer of property rights, you receive a registration certificate (Title Deed) immediately, confirming your right to the acquired property.

Title Deed:

The following documents are required for registration in the Land Department:
1. Original passports of the buyer and seller,
2. Original certificate of property registration in the name of the seller,
3. Original permission to sell the property from the developer (NOC),
4. A copy of the sale and purchase agreement.

The registration of real estate for the new owner takes place offline in the Land Department.

If you're unable or prefer not to be physically present in the Land Department during the registration of property transfer, you can assign this task to our agent. This can be done by providing a notary power of attorney.

Please note, the online notary certification of the power of attorney is priced at $700.

Final settlements between you and the seller occur during the property rights transfer. You'll be asked by the state registrar to settle any outstanding balances and sign a document confirming that the seller has no claims for property payment.

Typically, settlements are made through pre-prepared bank checks. If you do not have a Dubai bank account or cannot issue a bank check, our team at Independent can assist you. We accept payments in various forms, like cash or cryptocurrency, for your convenience.
Mortgage for real estate:
There is an option with arranging a mortgage for real estate. A foreign buyer can get a mortgage for 60% of the property value. Mortgage rates: 6% for non-residents.

This is beneficial for you because your property will already be bringing you income and from this income, you will be able to pay the mortgage.

Documents required for obtaining a mortgage:
  • Passport all pages
  • National id card if any
  • Last 6 months personal Bank statement
  • Latest utility bill
  • Income proof (Salary certificate if salaried , Trade license & Share certificate if self employed)

Securing a Mortgage with Independent: A Step-by-Step Guide
  • Start by sending us your documents.
  • Next, our broker will send applications to multiple banks.
  • Within a day, you'll hear back from us with various bank offers. We'll then decide on the best bank and plan for you.
  • We'll arrange your visit to Dubai for signing the offer and opening an account.
  • After the paperwork is signed, expect your account to be open within a week. The bank will then deposit the loan amount within the next 15-30 days.
  • Finally, you'll need to visit again to finalize the property purchase. Please note that if you're purchasing property through a mortgage, your presence is mandatory during the transaction.
How to manage real estate to get over 9% per year?
Let's consider a step-by-step plan for managing a client's property using our company, Independent, as an example:
1. Signing a cooperation agreement
The first essential step when handing over an apartment for our management is signing a three-year cooperation agreement. This agreement details the conditions that need to be observed, as well as establishes the amounts of monthly payments you will receive.

In addition, the contract stipulates your preferred method of payment to ensure maximum convenience in receiving funds.

This contract serves as a guarantee of our mutual transparency and long-term partnership.

What does our guarantee include?
  1. Registration with DTCM
  2. Payment of utilities (DEWA), gas, AC, Wi-Fi
  3. Payment of consumables according to DTCM, including bed linen, towels, dishes, etc.
  4. Cleaning
  5. Advertising to find tenants
  6. Check-in, check-out of tenants
  7. Service Charge
  8. Pest control
  9. Preventive maintenance up to 500 dirhams

What is not included in our warranty?
  1. Repair
  2. Furniture
  3. Decorations

Example of a contract we sign:
2. Getting the property ready for handover
The next step in our process involves getting your property ready for handover, in line with the high standards set by DTCM.

If needed, we'll take care of any repairs and handle all the packing, including furniture, while keeping DTCM's standards in mind. We also ensure the apartment is cleared out to meet our customer's expectations.

Once the property is ready, we'll arrange a professional photoshoot to showcase it on specialised platforms for client acquisition. It's worth mentioning that similar services offered by other companies often come with a commission fee starting at 500 AED and above.

Our aim is to prepare your property to the highest standard and provide additional services at no extra cost to you.
3. Expert Marketing and Sales Department
We broadcast our apartment details to a broad international and local viewership using popular online platforms like Dubizzle, Bayut, Property Finder,, Airbnb, and our own agency network.

Our effective sales department is equipped to locate tenants for your apartment in just two weeks. Our extensive contact network and strategic marketing techniques enable us to guarantee quick and efficient rental of your property.
4. Our tenants appreciate us because we prioritize their satisfaction
We ensure exceptional service for all our landlords and maintain constant communication, round the clock.

We arrange flexible check-in and check-out times for tenants, adapting to their requirements.
We enter into formal contracts with each landlord, providing security for both our company and our clients.

Before moving in, each landlord places a deposit, safeguarding the condition of the items in the rented apartment.
5. Rest assured, your property is secure with our comprehensive post-guest check
Once a tenant moves out, we carry out a detailed examination of your apartment and its furnishings for any potential damages or signs of wear. If damages are found, the tenant is promptly contacted, and the necessary amount is deducted from their deposit. This procedure not only guarantees the upkeep of your property and its furniture but also ensures adherence to the deposit agreements, making your property ready for the next tenants.
6. Finances
Each month, on the tenth, we'll arrange your 9% per annum payment in the method that works best for you.

We offer several payment options:
  1. Bank transfer
  2. Cryptocurrency payment
  3. Payment to your bank card
  4. Cash

We aim to adapt to your needs and offer flexibility in selecting your preferred payment method.
Who are the rental clients?
Mostly, it's 1-2 people in an apartment. Usually, these are people who have moved for their first contract, for 1 year. They are not sure if they will be working, so they rent an apartment on a monthly basis. Then they extend it further. Many have a company that pays a certain amount of money for real estate per month and they want to spend this money in full to live comfortably
Property maintenance costs
  1. No property tax. Dubai sets itself apart from many international investment hotspots by not imposing a mandatory annual property tax - a cost which can run into the thousands in parts of Europe.
  2. Building maintenance fee. Property owners are required to pay an annual fee for the upkeep of the building and surrounding area, including its infrastructure and utilities. Foreigners pay this fee in full, unlike UAE citizens.
  3. Fee paid annually in advance. This fee is calculated on a per square meter basis, ranging from 15-60 US dollars. On average, it's about 1.5-2% of the housing cost. While it's decreasing in some areas of Dubai, it's important to note that this fee is paid up front, in full, for the year, and is automatically deducted from the bank account.
  4. Municipal fee. Should the owner decide to rent out the property, they'll also need to cover a municipal fee, which amounts to 5% of the rental cost.

The collected funds are allocated between two pots - a general fund and a reserve fund. The general fund covers the cleaning of the building and communal areas like gyms, playgrounds, recreational spaces, and pools, as well as the maintenance of greenery and appliances. The reserve fund, on the other hand, is saved for long-term, major repairs and equipment replacements.

Utility Payments

  1. Air Conditioning. After signing a sales contract, the new owner enters into contracts for the supply of electricity and water (gas usage here is very rare) with the local company DEWA. Instead of heating, which is not needed even in the coldest time of the year, a centralized air conditioning system is used - that is, there is no need to install an individual air conditioner. The cost of air conditioning depends on the number of floors in the building and the air temperature, but it usually ranges from 40 to 120 US dollars per month.
  2. Water and Electricity. The calculation of payment for electricity and water is based on meter readings, and the rates are determined by the living area, the number of people living in it and the usage time. One will have to pay at least 50 US dollars per month, but usually, you should expect an amount 2-3 times more, which is quite comparable to many European countries. The company DEWA also issues a bill to tenants in the amount of 5% of the rental cost, which needs to be paid every month in addition to the actual consumption bill.
Property taxes in Dubai
Here's a look at some of the key taxes that are set at 0% in Dubai:

  1. Personal Income Tax: In Dubai, no tax is imposed on personal income, and this extends to both residents and non-residents. So, earnings from employment, business activities, or investments are typically free from income tax.
  2. Corporate Profit Tax: Dubai offers a business-friendly tax climate. Firms established in Dubai's exclusive free zones can benefit from a 0% corporate profit tax rate. But keep in mind, this mainly applies to firms in free zones, and certain business activities conducted outside these zones could be taxable.
  3. Capital Gains Tax: Dubai refrains from imposing capital gains tax on proceeds from the sale of property or investments. This implies that individuals and companies can potentially profit from the sale of assets without being liable for capital gains tax.
  4. Wealth Tax: Neither individuals nor companies in Dubai are subjected to a wealth tax. There's no annual tax on personal wealth or assets.
  5. Inheritance Tax and Legacy Tax: There is no inheritance tax or legacy tax in Dubai. Inheritances and legacies are usually not taxed.
  6. VAT on Residential Property: Value Added Tax (VAT) is implemented in UAE, but residential properties are often exempt from VAT.

Additional costs when purchasing property:

When purchasing property, there are additional costs:
  1. Property transfer fee - 4% in Dubai.
  2. Administrative fee: $150 - one-time
  3. Registration fee: depending on the property's value:
  • 2,000 AED ($545), if the property is worth less than 500,000 AED or $137,000
  • 4,000 AED ($1,090), if the property is worth more than 500,000 AED or $137,000
Lesson learned? :)