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This is what $500,000 will get you in Dubai

Dubai may be one of the hottest property market in the world, but you will be surprised how far half a million dollars will still get you compared to other global cities.

As a foreigner, the United Arab Emirates allows you to purchase property in certain freehold areas. That leaves you with two basic strategy options.

Read MoreIs Dubai's property market still too hot?

Option 1: Go off-plan

The first option is to go off-plan with an established developer. Although financing will be hard to get for something that has not been built, you won't need to put down a lot of cash at the beginning anyway. Advantages include getting more floor space for your bag of cash, which the banks are unlikely to help you with.

One show home CNBC visited boasted 1,650 square feet of space in a one bedroom apartment surrounded by lush gardens. It will take time until you get to live in it, with delivery usually two to three years away. You will also struggle to find a bank that provides a mortgage for something that has not been built.

Your commute is likely to be longer in the mornings; the unit seen was about a 15-minute drive from downtown Dubai.

"A good chunk of our clients do flip their properties throughout the construction period with very nice returns," Darryl David of Smith & Ken, told CNBC. "You can be looking at about 13-15 percent return in 6-9 months".

Option 2: Buy an existing apartment in a prime residential area

Your other option is to buy an existing apartment in one of the highly sought-after areas of the city, such as the Dubai Marina, Palm Jumeirah or downtown Dubai, home to the world's largest tower. For $500,000 you can get a studio or a one bedroom apartment, depending on the quality of the individual tower.

The premium you are paying here is not only for a healthy rental yield of up to 8 percent net, but being right in the middle of the leisure and lifestyle buzz. There's also a metro station to get you around without a car.

CNBC took a closer look at a serviced studio in the Marina, with fabulous views of the sea as well. You'll get 548 square feet of space and a parking spot for that hot car.

Read MoreWhich property market is seeing a bubble?

Some basic tips

CNBC also spoke to some of the country's leading brokers to get some pointers as you traverse the market:

• Most advertised prices exclude an official 4 percent transaction fee and a 2 percent commission if applicable for the broker.

• If you're buying off-plan, make sure you look at the track record of the developer. You don't want to be left stranded with a major delay in handover or even cancellation when the market goes down.

Read MoreProperty: The greatest risk to the UK economy?

• All brokerages, and brokers, need a license from the local regulator to work in Dubai. Whoever you are dealing with, check he or she is a registered real estate agent. Otherwise walk away.

• Cash is king in Dubai. It is estimated as much as 70 percent of property transactions are done in cash. You can get a mortgage as a non-resident or overseas investor through selected banks, but there's less than a handful to choose from.

• Keep in mind this is a pro-tenant rental market. You can only ask for them to leave if you want to move in yourself, in which case a one-year notice must still be given through the public notary.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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