Choosing Whether to Rent or Buy Real Estate to Live in Dubai
The decision to rent or buy a property is a significant one, and it is essential to weigh the options carefully before making a choice. The current market conditions in the UAE heavily favor buyers, and housing prices are at a low, making it a good time to invest in real estate. However, the decision to purchase a home depends on several factors, including one’s financial status, future plans, and market conditions. In this article, we will look at the factors to consider when choosing between renting or purchasing and look through the advice real estate experts in Dubai provide their clients with.
Consider Your Future Plans
The first factor to consider when deciding whether to become a tenant or a rightful owner of an apartment or a house in Dubai is your future plans. If you plan to stay in the UAE for at least the next five years, then purchasing housing might be a wise investment. However, if you are not sure about your plans or think they might be short-term, becoming a tenant might be a better option. It provides more flexibility, allowing you to move to a different country with ease.
The city offers a wide range of options, with a variety of popular areas and neighborhoods. Whether you are looking to reside in a premium apartment situated in a high-end residential tower or a more affordable villa, there is something to suit everyone’s taste.
The city’s neighborhoods are different from each other and provide various paces and styles of living. One of the most popular areas with housing units is the Dubai Marina. The community is located on the waterfront and features numerous high-rise apartment buildings, as well as shops, restaurants, and other amenities. Other popular areas include Downtown Dubai, Jumeirah Lake Towers, and Palm Jumeirah.
If you are looking to have a more spacious and private lifestyle, many neighborhoods offer villas and townhouses. Some of the most popular areas with villas and townhouses include Arabian Ranches, The Springs, and Emirates Hills.
Overall, the metropolis offers a variety of residential property options to suit all needs and budgets. With numerous popular areas and neighborhoods to choose from, renters and buyers alike can find their perfect home in this bustling city.
Check Your Financial Status
Another critical factor is your financial status. Buying requires a substantial investment, including a minimum down payment of 20% for ex-pats. However, if you do not have the financial resources to make the down payment or cannot pay off the mortgage in monthly repayments, renting might be a better option.
If you are planning to own a unit, the down payment is the initial cost that you need to pay. This payment is a minimum of 20% of the object value for both UAE nationals and foreign investors. Apart from the down payment, you also need to pay additional fees such as:
- the Land Department commission,
- property registration fee,
- real estate agent commission,
- mortgage registration fee,
- loan establishment fee.
To get more information, please contact specialists of the https://www.axcapital.ae/ real estate agency.
If you prefer to take a mortgage, the total cost of a one-bedroom apartment in Dubai Marina can be estimated by factoring in the five-year mortgage value, interest rate, and service charges. On the other hand, renting a one-bed apartment in the same neighborhood over five years can incur costs such as:
- annual rent,
- broker fee,
- Ejari registration commission.
However, it is important to note that paying to stay in somebody else’s apartment or house means the money is lost forever while paying EMIs towards your own home can help you become a homeowner and secure your future income. And don’t forget that such an investment has a good chance of appreciating over time, resulting in better rental yields. It’s essential to carefully calculate all the financial expenses involved and weigh up the long-term benefits of each option. It may be a wise decision to consult with a professional to obtain up-to-date prices and legislation changes.
Consider the Real Estate Market
At the present, buyers are in a better position in the UAE real estate market, with a consistent return on investment reported throughout the emirates. However, as market conditions can be volatile, it’s crucial to stay informed on current trends to make an informed decision. There is a variety of surveys indicating trends in different neighborhoods of the metropolis. While declining rent and property prices make for an attractive market, these conditions may not remain sustainable in the long term. It’s important to be mindful of market conditions and price trends when making investment decisions.
Consider the Level of Control You Need
One factor to consider is the level of control you need. The market in the emirate offers unique options for ex-pats and foreigners to own property in specially dedicated areas or, as they call it, zones. The Dubai Government passed a decree in 2001 that allowed foreigners to own property on a leasehold basis, which was followed by the right to own it on a freehold basis in 2002. Therefore, it’s important to understand the differences between the leasehold and freehold options available in the UAE.
Leasehold provides you with the right to occupy the unit for a fixed period, generally up to 99 years. However, you will not own the land on which the unit is built. Instead, the ultimate rights to the land revert to the freeholder at the end of the lease period. In contrast, freehold provides absolute ownership of both the object itself and the land on which it’s built, allowing you to sell, lease, or occupy it at your discretion.
While leasehold provides temporary ownership rights, it may be a suitable option if you are looking to lease a place and stay in the emirate. On the other hand, freehold zones offer complete control and flexibility over the property, but they may come at a higher cost. As with any investment, it’s essential to recognize individual circumstances and long-term goals before making a decision between leasehold and freehold ownership.