Quote:
Originally Posted by KemoSabeNada
Having a bit of a dilemma these days.
I live in the Middle East and plan to stay until retirement, which is ~20 years down the line. Tired of paying rent here I decided to buy a house in an established and well known neighborhood in November last year. The prices hadn't been that low since 2010 when I bought and I felt I got a good price.
Right now we are experiencing an insane surge here. Prices for some areas/houses has gone up 40% since January. This is mostly due to this country (United Arab Emirates) being the only place on the planet that is fully open for business (no quarantine on arrival, everything is open as usual, booze is flowing etc). Plus they just starting giving out residency status and potential citizenships for investors. Of course it also helps that there is no transparency here, nobody cares where the money comes from. Right now they have an influx of Chinese, Indian and Russian buyers, but I also see more Americans than before.
When I signed the papers I paid ~993k USD. That was slightly above the median because of the location within the community. I put in roughly ~100k in renovations; did all the bathrooms, new floors, new deckings outside, polished the kitchen, smart home stuff etc. The same exact house (in a worse location) now sells for 1.3-ish, without any renovations whatsoever. The agent who handled the sale on behalf of the previous owners says I can expect to get 1.6 now.
Let's say we remove the agent bullshit tax and say I could get 1.5, that would be a rough net profit of 220-250k (I had to cover all the sales costs when buying which is the norm here). I think a lot of people would take the money and run, but I spent a lot of time on the renovations, it was extremely frustrating at times and the number one issue I have is that I sell and buy in the same market. I would have to go back to renting again, or go for something run down and rebuild again which I dread right now as I just finished this one.
Would you sell if you're in my shoes?
Thanks for reading!
Ps; Here the buyer carries most of the cost of the sale/purchase. I will have pay around a small fee for the marketing, the agent fees and government fees are the buyer's responsibility. Also there are no taxes here since that is haram, so I will pocket the rest of the profit outright.
Your post is pretty much akin to asking us if we think the market will fall. Nobody knows. Certainly if interest rates rise the market will nosedive but that would be contrary Federal Reserve guidance. You said it yourself that you bought at a low. That should mitigate some of the downside risk and frankly your profits don't sound all that great if you truly did buy at a low, which tells me there is likely more upside potential.
One would need to understand the rental market to really make a determination though. If rent prices are low and not expected to rise much then perhaps a case could be made for cashing out. This would especially be the case if property taxes, hoa fees, and assessments are high (if your monthly fees are not much less than renting then certainly it makes sense to rent).
I'm no expert on UAE but my understanding is that aside from an uptick in cases in recent months, UAE has done a fantastic job of handling covid-19 relative to other countries. If a country/state/municipality has shown competency in implementing common sense solutions that are business friendly then that's exactly the type of place that I'd want to invest my money long term.