Property Maintenance Costs Could Sink Some Dubai Owners

---

(DUBAI, UAE) -- Owners of properties in the freehold areas of Dubai could be hit by major maintenance charges which should have been identified prior to purchase, according to the property management arm of a leading real estate developer.

"Some owners are jeopardising the return on their investments by not adequately accounting for depreciation on MEP equipment," said Mazen Falhout, General Manager, MAGme Property Solutions, a division of the MAG Group.

Dubai property owners now have the opportunity to play an active role in the management of their properties as the new owners' association management regulations, implemented by Dubai's Real Estate Regulatory Authority, come into effect.

Enforcing the regulations means that in addition to routine maintenance and upkeep charges, owners will have to pay premiums for building insurance and an emergency reserve fund to take care of big maintenance jobs or replacement of essential equipment.

Reserve funds not only help the current owner, but makes the property more attractive to prospective buyers and the secondary market. "When considering a real estate investment, prospective owners should always seek advice from professionals who can evaluate all potential operational costs," said Falhout.

Replacing an air conditioning master unit  in an average tower building costs around $68,000; " that amount must be built-in over ten years when it reaches the end of its working life," Falhout explained. "With rents falling at least 40 percent over the last 12 months, many owners are now faced with fees that they cannot simply pass on to tenants if they want to remain competitive in the market."

"Prior to June 2008, investors did not care too much about service charges or operational costs, many were only speculating on the rising price. Now that party is over, and owners have to be responsible for their investments," added Falhout. 

MAGme provides real estate management services from sales and marketing to property management and owners' association management.

---