Bahrain, Dec.01.2007
Reasons to invest in Bahrain
- Booming economy/ amazing appreciation
- Excellent protection from falling Dollar
- No income tax
Bahrain is an island country located between Saudi Arabia and Qatar. This place is booming with development and opportunities; it reminds me of the Las Vegas real estate boom three years ago. What’s exciting is that this market is in the beginning stage of its growth. After gathering all the pertinent information, I decided to visit this country myself and I am writing this note from Bahrain after spending a few weeks here personally researching current opportunities. I have to admit that I wouldn't be able to see the inside of this market without a support of local friend- a real estate agent and a local developer. After all, it's important who you know in this country.
Properties in Bahrain are much cheaper than properties in Dubai, with huge demand for both residential and commercial projects. Land prices doubled in the last year alone and are expected to go up in price on average 30% by January 2008 due to the huge demand for construction sites. It is an island and the land is limited and owned by just a few people. Fortunately I have some access to vacant land.
Foreigners can own properties in designated areas of the country... and it happens that these are the most influential areas with the best return on the investment. For more information about ownership please click the "Ownership" link on the left.
I have been a real estate agent in Las Vegas and for the last several years I have worked with many real estate investors. I have researched investment opportunities in the US and abroad. Recently I decided to expand my research to the Middle East and found the fastest growing economy in Bahrain.
Reason for the growth
One of the reasons for Bahrain's real estate boom is the huge business growth in Saudi Arabia. Bahrain is connected to Saudi Arabia by a bridge, and people can commute from Bahrain with just a short, 40 minute drive. Bahrainis are taking advantage of employment and good income opportunities in Saudi Arabia, but don't want their families to live there due to very strict Islamic rules. Bahrain is a modern country, an ex-British colony. Alcohol is legal here and every weekend the traffic over the bridge looks like traffic from LA to Vegas!
Rental situation
Renting in Bahrain is very expensive. For example, to rent a new villa (approx. 3,000 sq.ft.) will cost about BD1,500 = US$4,005 per month. Utilities usually are included.
It is very difficult to find an apartment to rent and if you are lucky enough to get one, a 1 bedroom unit will cost anywhere from about BD500 = US $1,330 per month, and up.
Investment options
Local press write that real estate value will double in near future. Here are your options:
1. You can invest in a typical high-rise condo project with prices starting in the low $300K’s. Many projects will be ready at the end of 2008 while some won’t be complete until 2009. Current prices for a new condominium under construction start at about $135 per sq. ft. and go up from there.
2. Another way to invest is to buy land and wait till the middle of 2008 for it to appreciate. Prices of land are going up daily. As I noted in the first paragraph, supply of land is very limited and it seems to be the best investment at this moment.
3. Invest in larger projects in partnership with a local developer with at least 70 to 80% potential profit within about 2.5 years.
4. If you are looking for a larger income property, build a villa compound and collect the rent, with a CAP Rate of about 10%
Currency Exchange
Currency Converter Results Friday, November 30, 2007
1 US Dollar(s) = 0.3751 Bahraini Dinar(s)
1 BHD = 2.66596 USD
1 USD = 0.3751 BHD
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