As part of its strategic plans and programs, the Kingdom has placed real estate investment at the top of the list of sectors that support development; in fact, it is considered one of its main pillars. It is characterized by a fertile environment that yields substantial profit margins, driven by the country’s active urban development, but it is also fraught with risks and vulnerable to unforeseen and unavoidable circumstances that defy planning or management.
Therefore, the idea should not be based on real estate investment be conceived or rushed into as a reaction to an event or emergency situation, especially in large cities that serve as economic hubs and are home to government institutions and public agencies, they remain the focus of real estate investors, who pay close attention to the finest details—from location to construction and nearby amenities, as well as the types of commercial activities along the street where the proposed project is to be built.
Therefore, those wishing to invest through (residential real estate rentals) must study the matter carefully and take into account that profit margins in this field are low, unless the rental value is high and lucrative; and working in real estate investments requires constant monitoring and effort; because competition is very intense. A report published before the COVID-19 pandemic confirmed that the purchasing power of short-term visitors to Riyadh tends to favor high-quality services, noting that the number of tourist accommodation rooms in the Riyadh region had reached approximately 36,901 as of April 2019, with an estimated occupancy rate of about 68.8%, This clearly indicates that the situation is not straightforward, unless the investor is risk-tolerant and has other investments to sustain their livelihood, This is especially true when we consider that more than 8,000 hotel rooms were already in the investment pipeline before the COVID-19 pandemic, which puts pressure on prices—something that some owners certainly do not want.
Many real estate experts do not recommend renting, except under specific circumstances or as a sound investment that avoids misuse and maintenance costs that lead to a waste of the property’s potential and lifespan, and this is where sound, long-term planning for this opportunity comes into play.
