Renting in Dubai: all the hidden costs
Are you planning to relocate to Dubai? Do you have ambitions to expatriate and would like to learn more about the local real estate market? If you decide to come and live in Dubai, you have two options: buying a property or renting.
At Dubai Immo, we can help you with both options. That said, you should be aware that renting can be quite expensive. We'll explain why in the rest of this article, with a look at all the hidden costs associated with renting.
1. Security deposit
In Dubai, the security deposit is a percentage of the annual rent. This amount must be stipulated in your rental contract. The amount payable will generally be 5% of the annual rent if your apartment is not rented furnished, and 10% of the annual rent if it is rented furnished. What's more, you absolutely must receive a receipt stating that, yes, you have paid this money. Rest assured, however, that this money is not "lost". In fact, if the property is returned in very good condition, you can be sure that you will recover the full amount paid. Please read any clauses added by the landlord carefully, to avoid any potential abuse. Some ill-intentioned landlords may take advantage of tenants' lack of knowledge, so beware.
2. Ejari registration fees
In Dubai, all rental contracts must be registered in the Ejari system, which is not free. This is a government platform for managing and regulating the local rental market. It also ensures that signed contracts comply with the law. The fee is 155 AED and is payable only once, at the time of registration. Contract registration fees are not necessarily payable by the tenant. Ejari fees can be paid either by the landlord or the prospective tenant. It's up to you to negotiate according to the situation.
3. Agency fees
It's very common for a future tenant to call on a real estate agent to help them find their future apartment in Dubai, or their future villa. But these agents need to be paid! They receive a commission on the annual rental amount. This fee is usually around 5% of the annual rent, and is payable when the rental contract is signed. Please note that these fees are payable only once. If the agency asks you to pay this fee again the second year for the same property, don't!
4. DEWA and Municipaly Fees
As a tenant, you'll have to pay energy charges. For this, you'll need to turn to DEWA, the Dubai Electricity and Water Authority. This is the authority that provides all these services to residents. Upon activation of the DEWA account by the tenant, a lump sum will have to be paid by the new tenant. This amount ranges from 2,000 to 4,000 AED, depending on the type of property (apartment or villa). The amount of the DEWA bill, to be paid monthly, will depend on electricity and water consumption. On each bill, tenants will also see the "Municipaly Fees". Over a 12-month period, these fees total 5% of the annual rent.
5. Maintenance costs
Maintenance costs should be factored into your monthly/annual budget. You'll need to take good care of your home and carry out any minor repairs.
Generally speaking, the landlord is supposed to be able to help or even cover the costs, but in some cases, it's the tenant who has to bear the financial burden of all these repairs, changes etc. Generally speaking, costs of less than 1000 AED are borne by the tenant, and more extensive repairs by the landlord. Beware: the owner may mention in the contract that the apartment must be returned with perfect paintwork, and the bill can quickly reach several thousand dirhams. Be sure to check these points when you sign your rental contract.
Is buying better than leasing?
So renting can be expensive. The alternative is to buy an apartment in Dubai! The first thing you need to know is that no bank is involved in the purchase process. So you don't have to pay any bank charges, or even interest. You pay according to fixed schedules, imposed either by the developer (for new-build properties) or by the seller (for existing properties).
Secondly, we can support you throughout the buying process. Dubai Immo 's teams specialize in property sales (apartments, villas) in the Emirates. Our teams can find you the rare pearl and advise you, from A to Z, to enable you to realize your life project, which is expatriation and the purchase of an apartment in Dubai.
