Real estate investments remain one of the most popular ways to preserve and grow capital. However, with the increasing interest in this asset, numerous rumors arise, misleading novice investors and hindering them from making informed decisions. The real estate market is a complex, multi-level mechanism that requires deep understanding and precise analysis. It is important not only to hear about real estate investments but also to separate truth from myths that traditionally surround this topic.
Myth 1: Real estate investments always bring passive income
On advertising posters, everything looks simple: “Buy an apartment in Dubai Marina — get 10% annual return.” However, behind these numbers, there are many variables. Renting out property — especially short-term rental — requires constant management: bookings, check-ins, cleaning, changing linens, handling complaints, updating photos on platforms, etc.
Even when management is handed over to a professional company, expenses amount to 20% to 30% of gross income. This is the standard rate for management companies in areas like Downtown, Palm Jumeirah, and Business Bay. In the case of long-term rentals, the task is simpler, but there is still a responsibility for technical maintenance, EJARI registration (RERA tenancy contract), annual inspections, and monitoring utility payments.
The actual net yield after all deductions rarely exceeds 5–6% annually if the property is managed properly. In less favorable areas like International City or Dubai Land, it can drop to 2.5–3%, especially during vacancies. Thus, myths about real estate investments claiming that income is guaranteed and passive do not withstand factual scrutiny.
Myth 2: The real estate market always grows
The Dubai market is subject to strong cyclical fluctuations. For example, after the rapid growth of 2011–2014, prices plummeted by almost 30% by 2019. The 2020 pandemic crashed the short-term rental market by 40%, particularly affecting owners of tourist apartments in JBR and Marina.
From 2022 to 2024, the market entered a growth phase again, mainly due to capital inflows from CIS countries, India, China, and Europe. However, the Dubai Land Department (DLD) notes stabilization: since the beginning of 2025, price growth rates have slowed down. Specifically, apartments in JVC and Dubai Hills only increased by 2–3% in the first half of the year — which is already below inflation.
Property prices depend on dozens of factors: new competition in the area, project completion timelines, political situations in capital donor countries (e.g., sanctions, currency restrictions), global loan rates. Therefore, the assertion that real estate in Dubai always appreciates is not only inaccurate but also risky as an investment strategy.
Myth 3: Real estate is the most reliable investment asset
In terms of legal stability, yes, Dubai is considered one of the safest jurisdictions. The Freehold Law for foreigners has been in effect since 2002 and has not been restricted. However, this does not mean that real estate is a guarantee of capital preservation.
Firstly, liquidity in Dubai is low: on average, selling a flat takes 60 to 120 days, and in the case of villas, up to 6 months. Especially if the property is in less popular areas like Sports City, Remraam, or Arjan.
Secondly, the risks of rising expenses are high. The owner pays an annual service charge — a fee for home maintenance. On average, it ranges from 14 to 25 dirhams per square meter per year, but in premium projects on the Palm, it can reach 60–90 dirhams. For an 80 sqm apartment, this amounts to 6,000–7,500 dirhams per year.
Thirdly, tenant losses are possible. The emirate is highly dependent on the expat sector. If there are layoffs in companies, an outflow of foreigners, or political restrictions, apartments can remain vacant for months. Therefore, myths about real estate investments claiming absolute reliability need careful risk assessment and comparison with alternatives.
Myth 4: Large sums of money are needed for real estate investments
This statement is outdated. Access to Dubai real estate is possible starting from AED 450,000–600,000 (approximately $120,000–160,000). In projects like MAG 330, Azizi Riviera, Binghatti Luna, studios start from AED 500,000 with installment options.
Additionally, there is the format of fractional ownership — buying a share in income-generating real estate. For example, in projects by companies like Stake, SmartCrowd, Eqarat, you can invest from AED 5,000 ($1,400) and receive returns from renting out properties proportionally to your share. These platforms are licensed by the DFSA (Dubai Financial Services Authority), ensuring transparency.
Another format is lease-to-own: you rent a property with the right to purchase it in 5–10 years. This reduces the initial burden, allowing entry into the market without a mortgage. Debunking myths about real estate investments, it is important to note that the market does not limit choices to large sums and opens up accessibility to a wide range of investors.
Myth 5: Investments do not require special knowledge
On paper, everything seems simple: the developer delivers the property, the management company rents it out, and you receive money. But the reality is different. You need to:
choose a project with transparent documentation;
check the developer in the RERA database;
read the SPA (Sales Purchase Agreement) contract and understand penalties for delays;
evaluate the location’s prospects: for example, JVC is an overheated market, while Dubai Creek Harbour is just entering a growth phase;
analyze profitability not just from brochures but also from real reviews, rental history, and price dynamics in the area.
Otherwise, you may overpay for illiquid assets, receive a reduced rental rate, or face project delays (a common occurrence even with major developers). Myths about real estate investments claiming ease and simplicity overlook the critical need for expertise and planning, which are key to successful investments.
Main aspects that debunk misconceptions
Rethinking myths about real estate investments:
- Asset management requires effort and expenses. It involves ongoing maintenance, tenant interactions, financial control, and legal aspects.
- Property prices are subject to fluctuations. Economic crises and market changes affect property values.
- Real estate is less liquid than financial instruments. Selling can be prolonged, especially in an unstable economy.
- Access to investments is possible with varying capital. Different formats and tools lower the entry threshold.
- Knowledge and analysis are critically important. Anticipating trends and assessing risks can increase profitability.
Conclusion
The modern real estate market does not tolerate cookie-cutter approaches and oversimplifications. Myths about real estate investments, often repeated without deep understanding, distort perception and lead to ill-considered decisions. Effective investments are based on knowledge, careful planning, consideration of economic realities, and readiness for asset management. Numbers, statistics, and specific examples show that real estate investments are a dynamic process that requires a balanced approach, not passive waiting.