Rent or buy? Invest your money once and become a property owner or rent a property and be able to move any time you want? When it comes to financial matters, buying a home and renting are completely different processes. The first one is an investment and the second one is expenditures. However, the demand for rental property is always high. In this article, we discuss the pros and cons of renting a property luxury real estate in Dubai as an example.
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- Real estate rental market in Dubai
- Areas for ramily holidays
- Community for businessmen
- Real estate for supporters of an active lifestyle and supports
- Rental price
- Most expensive areas of the city
- Rental pros and cons
- Dubai-Luxury.Property helps buy a property in Dubai
Due to the current events, more and more people tend to buy and rent spacious houses and villas as well as other high-end housing as it is profitable. According to Khaleej Times, mortgage interest rates in Dubai are lower – from 2% to 4%, and down payments are decreased from 25% to 20%. About 40% of properties in Dubai are sold using a mortgage.
Long-term rent is the most common in renting real estate in Dubai, since it does not require the owner to have a license. When concluding a contract for a period of less than a year, you cannot do without the license. In this case, the solution is to use the services of local real estate agencies or management companies.
Let's try to figure out what areas of Dubai are the most expensive and where it is preferable to rent property. If you prefer a beach holiday, you should pay attention to the coastal areas. Luxury apartments are used for rent in Palm Jumeirah. It is the largest man-made island in the world, where you can find both a spacious premium villa and compact, but comfortable apartments. The Dubai Marina community is also in demand. It is dominated by large properties, which are suitable for a family.
The business center of the metropolis is Downtown Dubai. It has differentdevelopment projects for business. District 2020, which is a free economic zone, is no less attractive. The Jumeirah Lakes Towers (JLT) and Business Bay communities are popular for work and residence. Ithas a developed infrastructure for both work and life. Modern development projects are attractive for renters. Newareas are being built in accordance with the latest technologies, which allows us to guarantee the most comfortable life.
The largest number of entertainment and shopping malls are concentrated in the Downtown Dubai area. Golf fans can rent a propertyat Jumeirah Golf Estates. Many sports are featured in the Dubai Sports City community. The new sub-community of Motor City will be perfect for motorsport lovers. Luxury real estate can be found in all areas.
Average rental prices are related to the location, level of comfort and its living space. In the most popular communities, the rental prices are the following:
- Two-bedroom apartments can be rented for AED 76,000.
- Three-bedroom apartments can be rented for AED 105,000 per year or more.
- Four-bedroom apartments can be rented for AED 190,000
- Five-bedroom apartments can be rented for AED 210,000.
- Two-bedroom apartments can be rented for AED 42,000.
- Three-bedroom apartments can be rented for AED 70,000.
- Four-bedroom apartments can be rented for AED 98,000.
- Five-bedroom apartments can be rented for AED 220,000.
Jumeirah Lakes Towers:
- Two-bedroom apartments can be rented for AED 44,000.
- Three-bedroom apartments can be rented for AED 70,000.
- ЖFour-bedroom apartments can be rented for AED 100 000.
- Five-bedroom apartments can be rented for AED 150,000.
Prices do not have a maximum limit, as it depends on the level of luxury real estate. So far, analysts have not noted a significant increase in rents, as many investors prefer to invest in a purchase.
One of the most expensive communities for rent is City Walk. The average rental priceis about AED 190,000. In Palm Jumeirah, this amount is AED 150,000. This figure is 10,000 lower than in Dubai Marina. The most expensive villas are available for rent in the Arabian Ranches community. The price for short-term residence can reach AED 240,000.
We can say that the most practical and convenient option for temporary residence is rental real estate.
The pros for landlords:
- Growth in demand. Lots of people from all over the world go to the metropolis. They go to rest or work. Besides, they do not always have a desire to buy overseas property.
- High ROI. It outperforms the indicators in European countries. For instance, while in London the ROI is slightly exceeds 2%, in Dubai it is 10% and more.
- No taxes. The owner makes a net profit. The renter benefits from a simple rental scheme and a minimum number of fees.
Pros of property rentals for tenants:
- Flexibility. A tenant is more flexible in terms of where to live, they are not attached to any country or city. They can always relocate;
- No mortgage;
- No need to think about furnishing as most of apartments are rented out move-in ready.
- Rent rates can be increased. This is an obvious disadvantage for tenants while landlords take advantage of this opportunity. However, the government are going to announce rental rates freezing. In this case, a landlords will not be able to increase the rent.
- Tenants as well as landlords cannot terminate a lease contract in advance. The relations between tenants and landlords are legally controlled. Landlords cannot evict a tenant, and tenants can move out whenever they want. The minimum lease term in Dubai is a year. Termination of a contract without any serious reason requires large fines;
- Large expenses. Very often you have to pay for a year in advance for property in Dubai or for every three or four months. It means that every time a tenant has to pay a large amount of money.
- Rent payments are often equal to mortgage payments. However, when you pay off your mortgage, you will have your own property;
- Renting a property does not give you full rights. For instance, landlords may not allow tenants to move in with children or pets.
- Is it possible to rent a property for a short period? Yes, there are no time limits for renters. The difficulties can arise only for owners. When renting out apartments for a period of less than a year, a special license is required. Therefore, most often the owner of the property does not contact potential renters, but the management company.
- Can the owner raise the rental price? The legislation provides for restrictions on its increase during the first two years of using the property. This rule does not apply to new renters. When signing the initial contract, the owner can change the price.
- Who can rent a property in Dubai? Nationals of any foreign country with a tourist or residence visa. The legal presence on the territory of the state is impossible without a resident visa. Besides, legal entities, which are registered in the UAE or act as representatives of foreign companies, can become renters.
- Is the rent agreement subject to registration? Yes, it can be done via EJARI. Each document is assigned a unique barcode. The responsibility for the lack of registration is not established, but in this case, it is difficult to defend your interests in court, if it is necessary.
- How is the payment made? In most cases, the money is deposited immediately for a year. It is possible to pay monthly or quarterly. The money is debited from the renter’s bank account automatically.
- Who pays for utilities? The costs of housing maintenance are borne by the renter, except for major repairs and an annual contribution to the housing maintenance. The contract may also reflect other payment terms by mutual agreement of the parties.
Although property rentals have many advantages, buying a property is a great investment. A property owner does not depend on a property maintenance company nor on a landlord. Even if you buy a property using a mortgage, you acquire an asset that is growing in price every year.
Looking for a buy-to-live or buy-to-let property in Dubai? Our team will help you choose the best option and walk you through the buying process ensuring you a safe and smooth experience.
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