With the growing population of Dubai, more people are opting to buy homes rather than rent and while there are some benefits to owning a home – such as being able to customize it – there can also be drawbacks. In this article, we’ll look at the pros and cons of buying and renting a home in Dubai.
The pros and cons of buying and renting a property in Dubai fall into four categories: the financial, the logistics, the everyday life and the outlook. I’ll discuss each as we go along.
- Financial
When considering buying a house in Dubai, the money involved can be a huge chunk of your savings and you’ll need to budget accordingly. If you’re doing it for the long-term, make sure you know how much is saved over the next 10-15 years. If you only have £5k to put down on a property, that means you’ll need to save £50k-£60k to afford it. Look at the amount of mortgage you’d be taking on and what your salary would be before you decide to buy. It’s also important to consider how much you need to pay monthly so that you don’t stay in debt the whole time, only for it to turn out that you didn’t need that money after all.
**Make sure you can afford it**
- Logistics
The logistics of buying a house in Dubai can be quite difficult and frustrating. You’ll need to get the paperwork, clear up the ownership issues (address, photos, registration etc), organise any legal changes and practicalities (like buying a stamp or a key) and then you’ll need someone to pick up your keys. It’s annoying.
**Put your plans on hold for a while**
- Everyday life
While this may seem like an obvious point given that you’re in Dubai, it’s worth considering what it means to get used to living in a place. You’ll need to move, which will cost you time, money and effort and it’s not always easy. The location you choose also affects what your day to day life is like – if you’re central, then it’s easy to get around but if you’re in JLT or Dubai Marina then it can be a pain. This may seem obvious but it’s worth considering how long the journey will take from your home to where your office is before making any decisions.
**Prepare for a lot of change**
- Outlook, outlook, outlook!
The lifestyle you’re looking for is also important – if you’re after the five-star hotel experience then maybe renting isn’t for you. You’ll need to make sure that the location and size of a house is right before making any decisions about moving there.
**Make sure your outlook matches the location**
While it may seem like we’re arguing against buying property, that’s not the case – we just want you to consider all options and think about what suits you. While renting doesn’t give you freedom to build long-term plans, it gives you the ability to change your mind at a moment’s notice. It also means that you can stick to your budget more easily than if you were spending money on property.
**Consider all options before making a decision**
1. Benefits of buying a home vs. renting
The pros of buying a home in Dubai are obvious. You can be as indulgent or frugal with your choice of property, you can choose the location that suits you and you can touch base with neighbours as often as you like. The drawback isn’t as simple to explain though – if something goes wrong, it’s too late and you’ll need to fork out a lot of money for a new property or wait until the problem is fixed. There’s also the issue of the price, as it will affect your monthly budget and you have to be able to afford it.
**Consider all the pros before making a decision**
- Benefits of renting vs. buying a home in Dubai
People normally choose to rent for financial reasons – such as being able to stick to their budget better than if they were paying off a mortgage month by month.
- What to consider before making a decision
If you’re considering buying a property in Dubai, it’s important to consider all the pros and cons of the decision before making a final decision. It’s a big step and if you’re not 100% sure about it, it might be better to wait. If you’re in a position where you can afford the monthly payments without problem, renting is probably the best option. It gives you the freedom to change your mind and move at a moment’s notice.
**Consider all the pros and cons before making a decision**
- What about moving out of the UAE?
If you’re in this situation, buying is probably more sensible as you’ll have more time to plan your move and gather the money together. If you are moving out of the country, renting is probably best though – it’s more cost-effective than buying.
**Consider all options when you’re moving out of the UAE**
- Location and lifestyle considerations
The location is important – it needs to be close enough to work and home, but far enough away from the city so that you can relax without being in the middle of a place full of people. Depending on your lifestyle, the location you choose will depend. If you like being close to the action then Dubai Marina is one of the best places to be, but if you prefer solitude and relative peace then Jumeirah is a better option.
The weather in Dubai is going to be a factor as well – if you’re hot all the time then a cooler place might be better. Once again, this comes down to personal preference.
- 5-star hotel vs. the local community
If you’re mainly going to be spending time in the 5-star hotels that are found around the city, then staying in a well-known place will be fine. However, if you plan on taking advantage of all that Dubai has to offer and have a social life, you might want to consider living in a community with a lot of other people who have similar interests. You’ll get to know people better than they would in a hotel where everyone is transient.
- Best areas to rent for quality of life
Depending on your lifestyle, you’ll want to consider which areas have the most to offer from a quality-of-life perspective. For example, if you like being as close to the beach as possible, then Jumeirah is probably not an ideal place for you. If you always want to go shopping then you might want to stay out of the Marina. The location is going to be determined by what you like doing most.
- Getting a loan and paying for rent and utilities
The average monthly salary in Dubai is roughly $6,100 per year. If you’re earning this money in the UAE, then getting a loan isn’t going to be an issue. However, if you’re earning a little less, it might be more difficult to get one.
Most people are paying around $800 to $1,000 per month in rent. The utilities come with the package and are not separately paid for as they are in other parts of the world. A lot of people have roommates, which helps keep the cost down. If you’re planning on getting a roommate, then it’s going to be hard to find someone who will pay rent when you’re not present most of the time.
- Not getting ripped off
Rents in the city have increased 10 times over the past decade, which means you need to shop around and not just settle for the first place you check out. There are dozens of sites out there that can help you find a good deal, such as DnataApartments.com. The easiest way to find a good deal is by using resources that help you compare prices across different locations on the same floor or in the same building.
The decision to buy vs. rent is a difficult one for anyone without previous experience in the United Arab Emirates. There are pros and cons to each, but it really depends on what you’re looking for. If you’re a first time buyer, you may be tempted to go with a home that’s potentially older or smaller. You can correct such issues by shopping around and finding the best properties available within your budget. If you know what your needs are, don’t overpay for something that won’t suit your needs and lifestyle. As a renter, it’s going to take some time to get used to the idea of living in an apartment, especially if it’s unfamiliar territory for you.