Question: My wife and I have been making extra payments on our mortgage whenever we can. We like the feeling that we're reducing our debt, but recently a friend suggested we might actually be better off investing that money by buying another property instead of paying the bank back early. We don't consider ourselves experienced investors, so we'd really appreciate your thoughts. MD, Arabian Ranches, Dubai
Answer: I think this is one of those questions where there isn't one specific answer, which is why it probably comes up so often.
I've met people who sleep incredibly well knowing they own their home outright. I've also met investors who deliberately keep a mortgage because they believe their money can work harder elsewhere. Neither approach is automatically right or wrong.
What matters is how comfortable you are with borrowing and what opportunities are available to you.
If your mortgage is affordable, and you're looking at another property that has the potential to produce a healthy rental income and grow in value over time, then there can certainly be an argument for investing rather than reducing debt as quickly as possible.
On the other hand, there is something very reassuring about knowing your home is becoming yours outright. That's something you can't measure on a spreadsheet. Property decisions aren't made purely with calculators. They involve confidence, family circumstances, future plans and sometimes, simply peace of mind.
As a real estate adviser, it would be easy for me to push the investing angle in order to try to build wealth, but I think the sensible advice for you would be to sit down with an independent mortgage adviser as well as your financial adviser and look at the numbers together. Sometimes seeing both scenarios side by side makes the decision much easier.
Q: I bought my villa almost eight years ago and, if I'm honest, never imagined it would perform as well as it has. Real estate brokers are constantly calling, saying they have buyers looking for homes like mine. This has made me wonder whether I should take advantage of today's market. The thing is, my family loves the house, I don't need the money and have no immediate plans to move. Am I becoming too emotionally attached to the property, or is there actually something to be said for simply holding on to a good asset? AS, Dubai
A: I smiled when I read your email because I've had exactly this conversation with many homeowners over the years.
Sometimes people feel they should sell simply because everyone around them is talking about how much prices have gone up.
Personally, I don't think that's enough of a reason.
A property isn't a share certificate that exists only to be traded. It's an asset that can continue to work for you for many years, provided the reasons you bought it still exist.
From what you've said, your family enjoys living there; you're under no financial pressure, and you don't have another opportunity waiting for the proceeds.
That doesn't immediately make me think you should sell.
Whenever clients ask me this question, I naturally wonder what life will look like the day after the sale is completed.
If selling allows you to move somewhere that genuinely suits your family better, to diversify your investments or to achieve another important goal, the conversation becomes interesting.
If, however, the money simply ends up sitting in the bank while you spend the next six months trying to decide what to do with it, I'd probably question why you sold in the first place.
Good properties are surprisingly difficult to replace. That's something many people only discover after they've already sold them.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@evadxb.com
