You may already know that NOVA offers three investment strategies: Long-Term Rent, Holiday Home, and Capital Gain. In this article, let’s review these strategies more closely — their specifics and benefits, challenges and pillars, and most importantly, how NOVA manages risks to provide investors with a combination of profit and peace of mind.
Please note that this article does not discuss other factors to consider when making an investment, such as location or property type. We encourage you to read our other articles on these topics. |
Long-term rent: regular passive income
Classic strategies never go out of style. Long-term rent involves purchasing a property to lease to tenants for extended periods, typically months or years. Investors profit via regular rental dividends and property appreciation when the investment period ends. For faster liquidity, investors can sell their tokens earlier on a resale market.
Long-term rent is popular among investors due to its stable, predictable rental income and potential for property appreciation. Here are its specifics:
- Lower property management intensity. Typically fewer maintenance requirements and lower operating expenses.
- Stable and predictable income. Generally lower than short-term rentals but consistent.
- No dependence on tourist seasons. Rental dividends remain unaffected by seasonal tourism.
- Crucial location selection. High occupancy rates and property value growth depend on choosing the right location.
For example, NOVA’s JVC 11 and 12 apartments are popular among long-term residents in Dubai who value the calm, green community that provides peaceful, village-style living.
Holiday home: higher returns for shorter periods
This strategy involves renting out properties for short durations, such as daily or weekly stays, offering both rental dividends and property appreciation. Holiday homes are not just for vacations; they’re also ideal for business travelers.
The specifics of Holiday Homes include:
- Higher rental income. Potentially higher than long-term rents.
- Intensive property management. Beyond simple repairs, creating a 5-star experience for guests is essential. This includes everything from maintaining aesthetics to ensuring guest satisfaction.
- Higher operating expenses. NOVA forecasts net rental income in advance, considering all the costs.
- Regulatory requirements. Some countries and cities may impose restrictions or require licenses for short-term rentals. NOVA ensures compliance with local regulations.
- Income variability. Revenue may fluctuate due to off-seasons or changing tourism trends.
Short-term rentals require creativity and skilled teams to stand out in competitive markets. For instance, properties can attract non-traditional tenants, such as filmmakers or event organizers, even during off-seasons. At NOVA, we treat short-term rentals more as an active business rather than a passive investment.
Capital gain: profit from market appreciation
Capital gain involves purchasing properties during the preconstruction phase at a lower price, aiming to benefit from price appreciation as the project progresses. While it doesn’t offer rental dividends, it has significant appreciation potential. However, it comes with specific challenges and requires a strong risk management:
- Market fluctuations. If the market declines during construction, profits may shrink or turn into losses. To mitigate this, NOVA carefully selects off-plan projects only in markets with strong growth potential.
- Completion dates. Factors such as weather, material shortages, shipment issues, or regulatory approvals can postpone completion. NOVA works exclusively with reliable developers who have proven track records of delivering projects on time and with high-quality standards.
- Developer reputation. Lesser-known developers may pose risks of bankruptcy or poor project delivery. To address this, NOVA conducts thorough due diligence, consulting with local professionals and legal experts to ensure projects meet stringent standards and developers have a strong reputation.
Capital gain, when executed correctly, can offer high potential returns. However, it requires careful research and due diligence to succeed.
NOVA strategies: Conclusion
Each NOVA strategy — long-term rent, holiday home, or capital gain — has unique advantages and challenges. By employing comprehensive risk management practices, NOVA ensures sustainable profitability and peace of mind for its investors.
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