Why real estate is the best long-term investment, by Kirstine Basse, Partner, Property Hunter

Hold the asset for a minimum five to seven years after delivery for effective yields and capital gains


What is the best long-term investment and is now the right time to invest in real estate in Qatar? This is the question on the minds of the majority of experienced and new investors. The short answer is yes; it is the time to buy. The tricky part is, what should you buy?
Experienced investors are aware of what you should buy. When the market is soft is effectively the ideal time to invest, with the strategy to hold the investment over a set period of time to ensure the best capital gain and high return on investment (RoI).

To decide what to buy, you must first determine together with your real estate consultant, what your priorities, objective and capabilities are in order to determine the size of the investment. Following this discussion, a clear objective is set, allowing your advisor to suggest, and if needed source, the best investment to achieve your target and goals.

What type of investor you are will determine what is the best long-term investment for you.

Value your time and consult with the right people. Why waste your time looking at small to medium-sized lands that might have the highest potential for growth if your budget does not allow you to pursue this? If you are looking for an investment with immediate stable return, then this should be on top of your must have list. If your objective is to switch from renting to owning your residence, a possible strategy of investing in off-plan opportunities will provide you with the best solution over time. However, if your objective is to divert your rent payment into immediate mortgage repayments, then ready or soon-ready properties should be prioritised. As an investor, you don’t have to love all your investments as your own home; you must only be satisfied with the potential return and capital gain it will fetch in today’s market and in the future.

Are you an end-user or investor?

Why rent when you can buy? Everyone should ask themselves this question. Make an appointment with a professional real estate consultant, in addition to your banker, to decide if the best way for you is to keep renting and putting some cash aside, or invest in yourself and your own future financial independence by buying a home. Maybe the right solution is to buy a smaller property.

Highest capital gain and return
Which area and what type of property should I invest in? 

Lusail

Lusail is the new kid on the block. But let’s reflect upon what opportunities and benefits investors need to look for.

Affordability and flexible payment plans allowing for comfortable repayments during construction and post-delivery with no interest has allowed investors to enter into new opportunities or add to an existing real estate portfolio with a minimum initial buy in. 

Erkyah and Yasmin City

Cities in Lusail offer an excellent variety of 1 to 3-bedroom apartments within residential and recently released mixed-use concepts. Lusail saw a strong appetite from buyers over the past year due to variety of factors, including connectivity via rail and Metro networks, a strategic location close to Lusail stadium, Entertainment City, Place Vendome and the upcoming waterpark and leisure island of Qetaifan North, as well as affordable and tailor-made payment plans. 

Lusail Marina

Off-plan apartments have been recently launched within Lusail Marina, where high-net-worth individuals and developers own the majority of buildings. Particular investment opportunities for apartments in Lusail Marina are preferred to those in The Pearl as investors seek for more efficient layouts and new buildings. 

Recently released plots within residential projects in Qetaifan offer the opportunity to own land plots in a unique location with views of the garden and waterfront. This concept has good potential for  growth and presents an opportunity for the middle to high-end investor category. Selection of the best plot with the highest expected capital growth should be determined in cooperation with an independent specialised advisor.

Land plots have shown to have the best appreciation opportunities when it comes to investments. However, restrictions have been put in place on developing lands, particularly in freehold and leasehold areas. The days of picking up prime location of land and allowing it to appreciate with minimal development and upkeep are of the past and should be kept in mind prior to making any commitments. 

Lusail commercial space

Commercial space is now available for sale within Lusail Marina. It is a good opportunity for stable and growing SME corporations who rent offices now to own them. This is  an option to off-set part of their rent directly into a future asset, via post-delivery payment plans.

The Pearl Qatar 

The Pearl is the largest delivered freehold waterfront development available in Qatar today. Units of varied size and quality are available for resale throughout different districts and in new projects. The island caters to the mansion and villa buyers as well as smaller investors looking for apartments or townhouses. Q3 and Q4 of 2019 presented fantastic investment opportunities, with investors receiving good yields.

How long should I keep a property before I make a profit?

Regardless of the reasons behind your investment, I believe in a general strategy to invest with the objective of holding the asset for a minimum five to seven years after delivery. During that period, you will have received effective yields. This timeframe is usually longer for end-user investments, due to the tendencies to add values by upgrading spaces and designs for a better quality of life. Don’t forget your personal taste and priority of value might not be the same for a future end-user, having their own preferences. If you decide to upgrade an older property, take your consultant’s advice on what would be the best investment for you.

Review your portfolio on a regular basis

One crucial aspect for all investments is to review your portfolio with your dedicated advisor at least semi-annually to spot any trends early on. This will allow you to plan to exit when appreciation goals have been achieved in order to release capital to re-invest in better new national and international opportunities at the right time. 

Importance of dedicated advisors

It’s common sense to go to a specialist for your medical check-ups to maintain your physical health and appearance following the advice of a physician. A professional real estate advisor must help your financial health to grow, maintain it and ensure best performance of your portfolio. So, choose wisely, and ask to have a face-to-face consultation to ensure trust. If you are not confident in the person you are dealing with, ask for a senior manager/consultant to be part of the strategy planning, then your sales consultant can be with you for viewings and selections. When it’s time to make a commitment, you should feel at ease.

Look to the future and buy in a prime location 

My advice for present and future buyers is to purchase in prime locations with unique layouts and views, whether buying off-plan or ready properties. The market will always have a strong appetite for stunning views and layouts. Offers can be tailor-made to your current situation and objective.