Making the Right Investment: Pros & Cons of Renting vs. Buying Property in Dubai
There are a lot of people in Dubai, both locals and expats, who are interested to invest in real estate properties. However, most of them remain undecided whether to pursue renting or buying property in Dubai. Before jumping into the investment, one must weigh and assess his/her financial status, as well as his/her short-term and long term goals. Here are some of the advantages and disadvantages of renting or buying property in Dubai that can help you decide better for your future investment.
Advantages of Renting Property in Dubai
- Budget-friendly (short time). Renting property is cheaper as it is not paid in large lump sums. Rental fees, DLD fees, registration fees and other additional charges are priced lower compared to buying property.
- Temporary commitment. Renting property is perfect if you plan to make your investment to run only for a short period of time. With tenants signing only a yearly contract with a landlord, an investor can easily get out of a purchase contract.
- Easy relocation. Another benefit of renting property in Dubai is it allows the flexibility of your unpredictable schedule. Working professionals, most especially expats, may receive job offers from other emirates or from another part of the world. Tenancy contracts can be easily cancelled and you can leave your existing home with ease.
Disadvantages of Renting Property in Dubai
- Restrictions to customize. Rented property is difficult to customize because it is not your own home. Some landlords may allow customization of property, but most owners would not shell out their own money to add new features for your convenience.
- Increasing rental rates. The trend of rent prices in Dubai are on an increasing rate which makes it not ideal for long-term living.
- Costly in the long run. Property rentals are good for short term investment, but if you are putting in money for rental fees for years, you are investing in a bag with holes. If you compute the total the amount you have spent on renting property, you realize that you have spent a huge amount of money on something that has no tangible value.
Advantages of Buying Property in Dubai
- Long-term investment. Buying property in Dubai allows you to invest in one of the most tried and tested investments that yields great returns.
- Full rights over your home. Settle in your own home which you can customize and renovate. It is always comforting to reside in a home that is fully yours.
- Wide range of opportunities. When you buy property in Dubai, you open yourself to different opportunities for greater returns. You can either sell the property for a higher price after sometime or have it leased for continuous income flow.
Disadvantages of Buying Property in Dubai
- Costly initial fees. DLD charges, agent’s fee and a lot more charges are paid upon the initial purchase aside from the actual cost of the property.
- Additional regular fees. Buying property also means paying a lot of fees which includes maintenance fees, insurance fees, mortgage fees and the like. Renters are spared from these kinds of fees.
- Susceptibility to unstable market. The changing real estate market may not be impactful to a homeowner, but financial losses can be experienced if the owner is leasing the property or using it as accommodation or holiday homes.
Factors to consider before buying or renting property in Dubai:
- Market status. Do some research about the current status of the real estate market and see how it fits your financial capability. Study also about the trend of property prices in Dubai over the last few years.
- Duration of stay. If you plan to live in Dubai for less than 5 years, renting property is the ideal choice. But if you plan to settle longer, it would be wise to get a house you could call your own, especially if you have family.
- Your budget. Most expats working in Dubai save up to send cash to their home country or to earn enough capital for a small business. Rental is most ideal for them so as they can maintain their living expenses while saving up. For those who have the financial capability to buy properties in Dubai, don’t rush in. Consult a mortgage broker first so you will have an idea how much the property will cost initially and how sustainable is your budget.
Finding the best property for rent or sale in Dubai
So, have you decided which type of investment suits your lifestyle and future plans? The next step is to find the property that suits you. Whether you are renting or buying property in Dubai, it is difficult to explore all the choices that the emirate has to offer.
With dxboffplan.com, you can easily search your desired property and refine results based on your specific needs. Easily find the best apartments for sale in Dubai or villas for sale in Dubai with just a few clicks from your browser. Start finding your next property investment now!