One of the most common mistakes investors make is investing money in an illiquid unit.An illiquid unit is a property that is difficult to sell or lease due to low demand from final users.
The final user usually wants to live in an ideal place for him according to all the characteristics.
Low demand from the end customer may be due to the unit's unattractive characteristics:
- view
- number of floors
- metric area, number of rooms, etc.
Examples of how investors lost money due to unattractive characteristics of view:
Example 1. View of the roadwayThe client bought a two—room apartment from Emaar on sale for 3 million dirhams on the podium floor, not knowing that the view from the windows in the apartment overlooks the parking lot - the broker deliberately concealed this fact.
Currently, similar apartments in the same building are valued at 4.2 million dirhams, but the client has not been able to sell his property for even 3 million dirhams for six months, for which he initially bought this unit.
Example 2. View of the parking lotAt about the same time, 2 investors purchased the same apartment in the JLT district, only one investor had a view of the picturesque greenery for 2.5 million AED, and the other had a view of the noisy roadway, the second unit was 10% cheaper, the investor decided to save money, because the layout and the district are the same, only the characteristics of the view differ
As a result, the investor, who has the view of parks and greenery, sold his unit for 3 million AED and the one who has a road permit can't sell it even for 2.3 million AED for more than 9 months.