Understanding the Costs of Setting Up a Real Estate Business in Dubai

The UAE is the most advanced business hub and offers various business opportunities for multiple business industries. However, the real estate business is booming in Dubai due to the high demand for rental properties.

Starting a real estate business in Dubai requires considering suitable criteria. Cost estimation for a new business is crucial for everyone. You must consider the laws and regulations to obtain licenses, permits, charges, and expenses to start any business.

In this guide, we share all the useful information about the cost of setting up a real estate business in Dubai and how much is real estate agent commission in Dubai?

Market Research and Business Planning

Business planning is crucial without market research, which is a key aspect of understanding the real estate business and Dubai’s landscape. You must start with an analysis and research to identify recent market size, real estate services and management, brokerage percentage, competitors, and business growth. This research and planning will influence the entire business plan and its cost.

First, you must plan your business structures and choose the mainland or free zones. Then, consider staff hiring, licenses and permits, certifications, employee visas, and costs. Further business operations costs include rental workspace, marketing and advertising costs, and other legal charges according to your business size and location. The workspace location will tailor your advertising and marketing strategy, your entire budget, and your impact on your customers.

Business Licensing and Registration for the Real Estate Business

If you want to start a real estate business in Dubai, considering the business licensing and registration fees is the first step. This fee depends on your workspace location, structure, and business activities. Starting from five thousand and twenty AED per business activity to the average base cost of twelve thousand and nine hundred AED for real estate business licenses. If you are consulting a real estate business specialist to navigate the process and calculate accurate licenses and permit fees, avoiding potential risks and hidden expenses.

Office Space and Infrastructure

Office space and infrastructure costs depend on the locations and sizes. The prime locations in Dubai have the highest rent, but you can find affordable locations that are available outside the city centers.  The additional costs of furniture setting, interiors, office supplies, equipment, and tech-savvy items can cost more based on your business requirements.

You can also consider co-working and shared office spaces for cost-effective solutions, including furniture, office supplies, equipment, and other utilities.

Staffing and Human Resources

The cost of hiring workers and staff depends on the size of the business and its requirements. Their salaries and wages depend on their education, experiences, and skills. The essential factors that impact human resources are recruitment expenses, work permits, visa application charges for hiring expats, and health insurance, which is mandatory for employees.

Hiring workers and staff might affect the location and workspace sizes. You can hire a small but efficient workforce in a co-working or shared workspace to reduce costs instead of renting a traditional office space in Dubai.

Marketing and Advertising

The real estate market in Dubai is thriving on targeted customers and advertising. You can expand your business widely using digital channels, social media advertising, property marketing web portals, and communities for cost-effective reach to the targeted customers. You can consider free or paid advertising options on digital platforms, obtain a more established presence, and explore insights, media, and industry events.

However, some of these events can be expensive, and you may consider them according to your business requirements. You must plan your marketing and advertising budget according to your requirements, target customers, and niche to achieve the desired outcomes and earn maximum revenue from the business.

Technology and Software

It’s a digital age, and technology is booming everywhere. The real estate business also needs tech-savvy operations to boost performance and business growth. Real estate businesses can acquire CRM or customer relationship management software that is effective for lead management, listings, or ads.

The CRM cost can vary from its features, such as basic, standard, and premium software packages are different. If you consider additional marketing tools or ad listings, the CRM subscriptions will increase accordingly.

You can also consider a user-friendly website to present your business and listings to the target customers. However, web development services can be an additional cost for your business for attractive web layouts and custom designs to attract potential clients.

Legal and Compliance Costs

You must consider the legal and compliance cost of setting up a real estate business in Dubai. You can consult legal advisors or lawyers for budget and expenses to navigate the business set-up, legal contracts, licensing, and other costs. You can also consider the retainer contracts for ongoing legal consultations.

Health insurance is mandatory for employees and you can face legal issues for errors and omissions in legal compliance for the insurance. To guard against professional errors and omissions, you can consider a lawyer for the consultation. All these services also charge a cost but it can vary according to the insurance coverage and lawyer fees accordingly.

Operational Costs

Real estate businesses must consider ongoing operational expenses. These expenses are the essential factors affecting the business costs, such as internet connections, utilities, and ad listing fees based on different platforms and media channels. Other additional expenses include IT support, communication and networks, software and technology equipment, and office supplies costs. Real estate agents need to visit the properties, and the transit cost is an additional expense for this business.

Contingency Fund

Every business experiences uncertain conditions and unexpected situations that may impact its operations and customers. Real estate businesses must also consider holding a contingency fund that provides a financial buffer for real estate market fluctuations or unseen forecasts or expenses.

The owner must hold the fund covering three to six months of operational costs, such as office rents, utilities expenses, ad listings, and staff salaries, to continue the business operations in case of emergency or no-profit and no-loss conditions. It’s essential to monitor regularly your business cash flow and adjust your contingency funds for continuity and growth.

How much is the real estate agent commission in Dubai?

Real estate agents’ commissions and salaries in Dubai depend on their work potential, property size, type, and work, such as buying, selling, or renting properties, large-size bungalows or small apartments, and office rentals on the mainland. Usually, residential property commissions are two percent plus five percent Value Added Taxes on buying and selling properties. According to the tenants’ annual rental charges, residential rental commissions are also two to five percent. Commission rates can be increased or decreased by negotiation from both parties.

How can Connect Zone help you Setting Up a Real Estate Business in Dubai?

The Connect Zone in Dubai is a top-notch business formation specialist that streamlines your real estate business set-up journey. They can offer complete assistance and consultations for;

• Connect Zone helps you choose the right business structure for real estate business in Dubai (mainland or free zones) to estimate the legal charges, operational costs, and other expenses.
• They help you navigate the process of obtaining permits and licensing, ensuring a smooth ongoing process and avoiding legal obligations.
• They also help you to find cost-effective solutions for work and office spaces or services in Dubai.
• If you plan to hire expats, they can help you hire staff and outsource solutions quickly while complying with the UAE laws and regulations.
• You can establish a well-focused and hassle-free real estate business with the help of leading services of Connect Zone in Dubai.