In recent years, Dubai has emerged as a thriving hub for both tourism and investment. With a booming non-oil private sector economy and iconic landmarks like the Burj Khalifa, the city presents promising opportunities for investors. One innovative platform that allows you to tap into Dubai’s real estate market without the need for significant capital or property management responsibilities is Stake.
What is Stake?
Stake is a fractional real estate investing platform based in Dubai. Through the Stake app, investors can easily invest any amount they choose in properties listed on the platform. The best part? It’s a hands-off approach, meaning you won’t have to deal with property management tasks.
As of October 2023, Stake manages over 100 properties with a total value of AED 201 million ($55 million). The platform has seen remarkable growth, with 352K+ registered users and more than AED 6.9M+ rental income paid. The top five investor bases are from the UAE, Saudi Arabia, Kuwait, the U.K., and India.
How Does Stake Work?
When you invest through Stake, you’re essentially buying shares in a Special Purpose Vehicle (SPV) that owns the title of the property. The investment is typically for a 5-year period, after which the property is sold, potentially at a profit. Notably, Stake has a secondary market, allowing investors to sell their shares at any time in the future, increasing liquidity and flexibility.
Advantages of Investing with Stake
- Real Estate Exposure: By investing in fractional real estate through Stake, you gain direct exposure to Dubai’s real estate market. With Dubai’s market on the rise, this can be a lucrative opportunity.
- Inflation Hedge & Store of Wealth: Real estate historically has been a solid hedge against inflation, and Dubai is no exception. Stake’s secondary market, planned for Q1 2023, will further enhance liquidity.
- Rental Income: Investing through Stake means you receive rental income automatically, typically on a quarterly or monthly basis.
- Tax-Friendly: Taxes on your property or ownership in the company won’t apply in the UAE. However, taxation depends on your tax residency, which can be advantageous for some investors.
- Great Support: Stake provides excellent customer support to assist you throughout your investment journey.
Disadvantages of Investing with Stake
- Economic Downturns: While Dubai’s economy is growing, there’s always a risk of economic downturns. Investors should be mindful of this possibility.
- Low Occupancy Rates: Properties listed on Stake currently have an average occupancy rate of about 80%, which may vary.
- Interest Rates: Rising global interest rates can impact property financing costs and potentially affect property values.
- Platform Risk: Although properties are held in SPVs, unforeseen factors could impact your investment if Stake faces financial issues.
- Regulation: While Stake is regulated by the DFSA (Dubai’s SEC equivalent), regulations may change in the future.
- Fees: Stake charges various fees, which should be considered in your investment calculations.
- Virtual Ownership: As a shareholder in an SPV, you won’t have direct access to the property for personal use.
How to Get Started with Stake
Getting started with Stake is a straightforward process:
- Register using a referral link to receive a 250 AED sign-up bonus (no minimum investment required).
- Verify your email and phone number.
- Download the app, and complete identity and address verification.
- Add a payment method.
- Browse available properties and make your investment.
Expected Returns and Fees
Stake provides transparency in projecting returns for each property. Most properties on the platform offer an annualized return of around 10-11% with a rental yield of 6-6.5%. Fees include property acquisition fees, yearly administration fees, exit fees, performance fees, and KYC/AML fees.
Also, there is a Stake’s secondary market which allows you to sell your property shares during two 2-week exit windows each year, provided you’ve held the shares for at least 1 year. This feature offers more liquidity and flexibility for investors.
Golden Visa Opportunity
Stake collaborates with the Dubai International Financial Centre (DIFC) to offer a straightforward path to obtaining the UAE Golden Visa. By investing at least AED 2,000,000 (approximately USD 545,000), investors can qualify for a 10-year renewable residency permit, providing access to various benefits, including family sponsorship and enhanced living and employment opportunities.
Trust Pilot
Here, you can read complete reviews about Stake on the TrustPilot website.
NOTE:
For European citizens eyeing the vibrant Dubai real estate market, there’s a smart way to enhance your returns—by minimizing investing fees. When you invest through Stake, your Euros or US Dollars are converted into the local currency, United Arab Emirates Dirham (AED), and this conversion often comes with small exchange rate fees. But fear not, there’s a savvy solution at your fingertips: Revolut.
Revolut is a free mobile application that empowers you to transfer money from Euros (EUR) to AED at the current exchange rates without incurring those pesky extra fees.
Disclaimer: This article is all about sharing investing ideas and not financial advice. Remember, always do your research and talk to a money whiz before making any big decisions.
