Top 10 Dubai property investment mistakes and how to avoid them

Property advice | 27.02.2026 | Leanne Ruscoe

Dubai continues to attract global capital in 2026, but beyond these headlines of record transactions lies a ground reality that many investors often overlook: smart investing here means being selective and not choosing out of impulse. Understanding the mistakes in Dubai property investment can make a huge difference between a high-performing asset and a costly lesson.

Let's understand the most common buying properties in the Dubai market, and how to avoid them.​

Mistake 1: Getting carried away by the hype

​Dubai knows how to launch a project. Branded residences, influencer previews, and sold-out-in-hours announcements, it's easy to get carried away in excitement. But smart investors don't invest in noise; they invest in numbers.

Instead of asking, "Is this trending?" one should ask, "Will this location still make sense in five years?

Avoid it by: Focusing on the prime fundamentals, connectivity, upcoming infrastructure, supply in the pipeline and real-time rental demand. If a project's value seems driven more by marketing than long-term livability, think before deciding.

Mistake 2: Underestimating the "hidden" transition cost

Beyond the property’s purchase price, investors often overlook additional costs:

• Trustee office fees
• Agency commission
• 4% DLD Registration fees
• Mortgage arrangement fees

Avoid it by: Budgeting an additional 6-8% above the property price to prevent liquidity stress.

Mistake 3: Overlooking the ongoing costs

Many investors pay attention only to the purchase price and projected rent, but true returns are determined by recurring expenses. Service charges can vary significantly across communities and directly affect net yield. A property that appears attractive on paper may deliver weaker returns once these costs are factored in.

Avoid it: Calculating net yield, not just gross rental income. Review the full service charge structure in advance and assess how it affects long-term profitability.

Mistake 4: Skipping developer due diligence before buying off plan

Dubai off-plan investment risks often surround the developer's credibility and delivery timelines.

Avoid it by:

• Checking the developer's delivery history
• Studying the past data or relevant performance
• Reviewing escrow compliance

If the payment plan sounds way too good, understand what risks you're underwriting.

Mistake 5: Falling for the “high-gross” yield myth

At first glance, 9% gross yield can look really tempting, but gross yields are just a top surface; they don't account for vacancies, maintenance costs, service charges, or property management fees. Once those are deducted, that impressive 9% can quickly come down to 5-6%.

Avoid it by: Looking beyond spreadsheet returns and focusing on areas with steady, long-term rental demand. Sustainable returns come from knowing what actually drives rental demand in the area.

Mistake 6: Buying without a clear exit plan

Many investors excitedly enter the market to buy, but very few know about the exit strategy. Are you planning to flit during handover? Refinance after appreciation? Or hold for long-term rental income? Without a defined strategy, you're simply reacting to the market instead of guiding your investment. Property type impacts liquidity, villas and apartments perform differently depending on your investment goals.

Avoid it by: Deciding your holding period and liquidity plan before signing the SPA. So when you know your exit, your entry becomes an intelligent choice.

Mistake 6: Buying without a clear exit plan

Many investors excitedly enter the market to buy, but very few know about the exit strategy. Are you planning to flit during handover? Refinance after appreciation? Or hold for long-term rental income? Without a defined strategy, you're simply reacting to the market instead of guiding your investment. Property type impacts liquidity, villas and apartments perform differently depending on your investment goals.

Avoid it by: Deciding your holding period and liquidity plan before signing the SPA. So when you know your exit, your entry becomes an intelligent choice.

Mistake 7: Working with an unlicensed agent

Dubai's property market is strictly regulated, but not everyone operating in it is. Trusting an unlicensed "freelance" broker to save on commission can cost you in the long term and open doors to unnecessary risk, misinformation or even fraud.​

Avoid it by: Verifying the agent's RERA license and ensuring the agency is officially registered. This simple check can save you and help you understand how to avoid property scams that Dubai investors usually face.

Mistake 8: Borrowing beyond marginal limits

Leverage can accelerate returns, but it can also bring in a lot of stress. In a high-interest environment, extending your mortgage to the maximum approved value can affect your monthly cash flow if rates rise any further.

Avoid it by: Stress-testing your repayments at higher interest conditions before committing. If the numbers only work in a perfect environment, the risk percentage may be too high.

Mistake 9: Having half-hearted knowledge about ownership terms

Freehold and leasehold ownership are not interchangeable. Freehold gives you full-fledged ownership of the property and the land, while leasehold offers usage rights for a specified period. Misunderstanding this difference can impact resale value, inheritance and long-term planning.

Avoid it by: Obtaining written confirmation of the ownership structure and legal rights before the transfer. Clarifying all the information at the beginning can avoid complications.

Mistake 10: Letting your emotions drive the decision

A skyline view or proximity to Downtown Dubai can win hearts, but visual appeal alone doesn't always convert into a strong investment.

Avoid it by: Separating lifestyle choices from income-driven decisions. Lifestyle features can influence appeal, but return-focused investors should pay attention to data, rental absorption, pricing resilience and long-term indicators.

Ready v/s Off-plan risks ( 2026 Comparison)

Why consult with Benham and Reeves

Dubai remains one of the world's best-performing real estate markets, but as it matures, success primarily depends on choosing the right projects, the right locations, and the right developers guided by data, not assumptions.

At Benham and Reeves, we build data around the investment decisions, rental sustainability and long-term capital growth. Book a complimentary private consultation with us to get an exclusive market overview of Dubai today.