Buying overseas property to rent out: UAE or Thailand

Buying overseas property to rent out: UAE or Thailand

When choosing a property to rent out, investors are faced with a variety of offers in different markets, each providing unique advantages. The UAE and Thailand are popular destinations due to their attractive conditions for buyers and high return potential. To make an informed decision, it’s important to understand which country will prove to be the most lucrative for property purchases.

In the UAE, particularly in Dubai, properties offer high rental yields. This region is known for its stable economy, favourable taxation conditions and strong demand for housing from both locals and expats. Additionally, the government actively supports investors by offering a residence permit in the UAE for property purchases, which adds further value to the investment.

Thailand, on the other hand, attracts buyers with its affordable prices and year-round tourist traffic, particularly in popular locations such as Bangkok, Phuket and Pattaya. The country is a desirable destination for holidaymakers from all corners of the globe, ensuring a constant demand for rented accommodation, especially during peak seasons. When comparing these markets, it’s essential to consider not only potential returns but also other factors such as the legal environment, taxation, value prospects and the quality of infrastructure. In this article, we take a closer look at the pros and cons of buying residential rental real estate in the UAE and Thailand to help you make an informed choice.

Thailand's property market for overseas investors

Bangkok, the capital of Thailand, has been repeatedly recognised by Airbnb as one of the most popular tourist cities. Unlike European resorts such as Spain, Greece and Turkey, where the tourist season lasts no more than six months, Thailand attracts visitors year-round. This means that rental flats and houses are in constant demand, which reduces the risk of losses for investors during the off-season.

Of particular note is the fact that Bangkok is one of the top locations for short-term rentals as reported by Airbnb. The annual tourist flow to Thailand is about 30 million people and this figure continues to grow. In addition to Bangkok, Phuket, Pattaya, Samui and Hua Hin are among the most popular tourist destinations in Thailand. Phuket has long been the country's second most important tourist centre. The construction of a new international airport, which has already been approved by the authorities, testifies to the growing popularity of the destination. Pattaya attracts holidaymakers with its sandy beaches, nightlife and variety of entertainment.

Building regulations on the island of Samui, located in the Gulf of Thailand, prohibit the erection of buildings taller than palm trees. As a result, most buildings here, including bungalows and hotels, are no taller than 2-3 storeys, which helps preserve the unique architectural character of the area. Hua Hin, an ancient and universally recognised royal resort of the country, is ideal for a quiet family holiday.

Gross yields from rentals of property in Thailand remain attractive to investors. As of Q3 2024, the average return is 6.27% per annum, up from 5.79% in Q4 2023.

The housing payback ratios for the most popular neighbourhoods are as follows:

Location and number of bedroomsPrice (USD)Rental fee (USD)Yield
Bangkok, Watthana
Studio 113,855  542  5.71%
1 176,204  813  5.54%
2 406,354  1,627  4.80%
3 712,083  2,440  4.11%
Pattaya, Jomtien
1 95,309  545  6.86%
2 195,793  1,089  6.67%
Phuket
Studio 80,403  463  6.92%
1 109,022  545  6.00%
2 258,926  1,499  6.95%
3 586,427  2,726  5.58%

Benefits of UAE property for overseas buyers

Buying property in the UAE to rent out has several significant advantages:

  • High profitability: Housing in the country, particularly in Dubai, provides rental yields that are considerably higher than those in major metropolises such as London, New York and Hong Kong. The average return on investment (ROI) in Dubai ranges from 5% to 9%, depending on factors such as location, property type and investment duration;
  • No taxes on housing and rental income: The absence of taxes on both property and rental income makes investment in the UAE even more attractive;
  • Stable economic growth: The UAE exhibits consistent economic growth, which contributes to the stability of its property market;
  • Steady demand from tourists: The continuous influx of tourists ensures a robust demand for rental properties. Additionally, the well-developed infrastructure and high level of security make the UAE an attractive destination for expats.
Properties for sale in UAE

In 2023, luxury flat prices in Dubai demonstrated an impressive growth of 17.4%, surpassing the global average of 2.2%. The profitability ratio is detailed as follows:

Location and number of bedroomsPrice (USD)Rental fee (USD)Yield
Flats in residential complexes
Downtown Dubai
Studio 397,495 2,155 6.51%
1 612,578 3,176 6.22%
2 1.06 million 4,992 5.64%
3 1.77 million 7,941 5.38%
4 6.81 million 22,688 4.00%
Palm Jumeirah
Studio 408,385 2,609 7.67%
1 947,154 3,970 5.03%
2 1.63 million 5,785 4.25%
3 3.08 million 7,373 2.87%
4 14.43 million 21,553 1.79%
Dubai Marina
Studio 353,934 1,815 6.15%
1 471,004 2,609 6.65%
2 762,319 4,015 6.32%
3 0.29 million 6,239 5.79%
4 2.72 million 9,415 4.15%
Business Bay
Studio 299,482 1,701 6.82%
1 462,836 2,269 5.88%
2 735,093 3,403 5.56%
3 1.16 million 4,991 5.15%
JLT
Studio 258,644 1,474 6.84%
1 430,166 2,268 6.33%
2 653,416 3,153 5.79%
3 878,053 4,537 6.20%
JVC
Studio 185,134 1,247 8.08%
1 279,090 1,701 7.31%
2 431,255 2,609 7.26%
3 564,462 3,176 6.75%
Arjan
Studio 176,967 1,055 7.15%
1 292,721 1,701 6.97%
2 443,778 2,268 6.13%
Al Furjan
Studio 147,699 1,134 9.21%
1 270,682 1,633 7.24%
2 411,592 2,223 6.48%
Apartments in Abu Dhabi
Al Reem Island
Studio 177,729 1,248 8.43%
1 245,031 1,588 7.78%
2 421,998 2,155 6.13%
3 598,938 2,946 5.90%
Saadiyat Island
Studio 340,321 1,089 3.84%
1 544,512 2,075 4.57%
2 1.03 million 3,630 4.21%
3 2.26 million 4,991 2.65%
Al Raha Beach
Studio 272,257 1,361 6.00%
1 326,708 1,815 6.67%
2 501,361 2,722 6.52%
3 735,093 3,823 6.24%
4 871,222 4,537 6.25%
Yas Island
Studio 231,415 1,361 7.06%
1 326,708 1,815 6.67%
2 544,514 2,950 6.50%
3 664,307 3,176 5.74%

Conclusion

Choosing an investment destination depends on various factors, including personal circumstances and preferences, making it impossible to unequivocally determine the most attractive option. Statistics confirm that the profitability of housing in the UAE can reach 9%, which is higher than in Thailand. Equally important is the visa policy; it’s not possible to obtain a residence permit in Thailand when purchasing a home.

In terms of costs, the initial investment required to purchase property in the Emirates is generally higher. However, investments in developments in Dubai are considered safer due to government protection. Additional advantages of the UAE include a wide range of freehold projects and the possibility of acquiring properties in full ownership, whereas, in Thailand, this applies to a limited type of property.

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