I highlight three strategies that work really well in Dubai to increase the cash flow of your real estate holdings. The Traditional Rental business model earns revenue by leasing out each asset to a single person or family. So it’s one family unit per property; a 3-bedroom property would earn revenue from one source. The other methods I discuss in this email work on maximizing the utilization of the asset to maximize its earnings. Employee Rental’s work by subdividing the unit into smaller individuated units and collecting multiple streams of income from just one asset. A 3-br property would be leased out to 3 or more family units, which creates multiple streams of income to raise your cash flow and returns. Cash on Cash (CoC) returns can exceed 20% from year 1 and will achieve 30% returns within a few years. Vacation Rental’s operate no different than a hotel and even price their bedrooms with the same dynamic pricing tools. Along with pricing they also optimize the tenant turnover ratio to maximize the assets occupancy rates. The returns offered by this strategy can be unbelievable with CoC returns exceeding 30% in year 1 and eclipse the 50% mark by year 5. The Lease Option to Buy method works like a much more efficient and profitable derivative of the fix & flip method. These properties are rented out to tenants that want to purchase the asset but are not quite ready for one reason or another. These tenants also purchase an option on the property that allows them to exercise their right to purchase the property within a specified period of time, say 3 years. This method can produce some of the safest and best yielding assets of any in your portfolio. All these methods should net you a minimum of 20% Cash on Cash return and all of them will be earning at least 30% consistently by year 4. Over the next several emails I’ll explain each one of these buy and let strategies and show you how to implement them on your properties today.
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