Dubai is a place that is recognized for plenty of reasons. This is why it attracts visitors from all parts of the world to come here for either work, travel, or settling in. But, buying property in a new place can be challenging due to the huge costs involved especially if you're not fully settled in yet.
That's why many people in Dubai prefer to lease apartments, penthouses, villas, and more based on their preferences. It helps the newcomers to stay away from the property ownership hassles and significantly high maintenance and repairs. But did you know? Finding the perfect property for rent can be a challenging task due to which you can end up making costly mistakes.
So, you are required to carefully read through your rental agreement and check all the hidden fees before you sign the agreement. To make things easier, we've compiled a list of these hidden costs. We'll also go through the steps of finding the perfect rental property to make a smart decision.
Let's examine a few of the rental property costs in Dubai that aren't immediately highlighted. Before you sign a lease, it's important to understand the costs involved, in addition to the monthly rent.
Security Deposit
In Dubai's rental market, collecting security deposits is seen as a common practice. It is essential as it safeguards the landlord against any harm or unpaid rent. Normally, it is equal to one month's rent. The landlord will undertake an inspection once you decide to vacate the property. If the landlord found anything in bad condition or anything unpaid or misused, they deduct the money in the form of repair charges and return the remaining sum.
Agency Fees
If you’re running after an agency to help you find your rental home, remember to be prepared to pay agency fees. Generally, it entails 5–7% of the annual rent is typically made up of these expenses. We know it is something that might feel a burden on you. But usually, people need to get help so that they can complete the procedure quickly and safely, knowing the local norms of the new country.
Ejari
The Real Estate Regulatory Agency and Dubai Land Department set up the Ejari system in Dubai. This is a well-known online registration system that has governed tenancy contracts in Dubai since 2007. Without the Ejari registration, one cannot acquire a rented space in Dubai. Your tenancy agreement must be registered with the Real Estate Regulatory Agency (RERA). Although it's critical to make this clear in your rental agreement, the Ejari registration cost is normally split between the landlord and tenant and is a one-time payment.
DEWA (Dubai Electricity and Water Authority)
Dubai's water and energy services are provided by DEWA (Dubai Electricity and Water Authority), a government agency. You must pay a security deposit to use the electricity and water supply in your rented space. The amount depends on the kind and size of your property, to activate DEWA services in your name. The cost of your monthly utility bills will also be your responsibility and is based on your consumption.
Chiller
In Dubai, due to extremely warm temperatures, one cannot survive without air conditioning systems. The price of cooling, sometimes known as "chiller fees," is a separate expense from your DEWA bill in many apartment complexes and some residential areas. Chiller costs are determined based on the size of your unit and consumption, and they usually go toward the building's cooling and air conditioning systems.
Maintenance
Maintenance is an ongoing task which keeps occurring back to back. Tenants often handle routine upkeep whereas landlords are typically in charge of major repairs and structural issues. This includes doing quick fixes to maintain the property's condition, such as mending leaky faucets, damaged light fixtures, or simple repairs. More or less, the annual maintenance cost can cost you somewhere between 1500 to 6000 dirhams which is quite high.
Repair
In Dubai, generally, the landlord is responsible for repairs but it is written in the agreement that they will only cover the major ones. During your tenancy, accidents or general wear and tear could occur regularly. You must pay for any necessary repairs if you mistakenly damage the property. Also, if you fail to make those repairs, your security deposit may be used to cover these costs, or the landlord may ask for a refund.
Housing Tax
Before signing a lease, tenants frequently are unaware of the Dubai Municipality housing charge. Depending on the location and the kind of property you're renting, some high-end residences in Dubai can be liable to the housing tax. It is generally there in 12 monthly instalments. It is wise to ask your landlord or real estate agent if there could be any potential housing tax obligations.
Parking Fees
While it is nowhere mentioned, most of the time, you are required to pay extra if your rental home has a parking space. Depending on the area and if the parking is in a safe, covered facility, these costs can vary greatly. You should prepare to pay additional parking costs even if your unit has allocated parking.
Community Fees
Some of the other community events keep happening regularly during festivals. Apart from this, the amenities of the fated communities are huge. You might be expected to pay monthly or yearly community fees in gated communities or apartment buildings with shared amenities like gyms, swimming pools, or landscaped gardens. These costs go toward maintaining and repairing these common areas and amenities. Tenants frequently have no idea about the cost until they sign a lease.
Exchange Rate Fluctuations
UAE Dirhams (AED) are used as the official currency in Dubai. When transferring money for rent and other expenses, keep exchange rate changes in mind if you get your salary in a different currency. Changes in exchange rates may have an impact on the cost of living and modify how much you spend overall when visiting Dubai.
Hidden expenses that could make renting your ideal home expensive. Follow the instructions listed below to protect yourself from unpleasant surprises. This will enable you to pick carefully when looking for the ideal rental home in Dubai.
Set a Budget
The first stage in your search for a rental property is to establish a budget. However, a lot of people fail to consider the additional expenses related to renting in Dubai. The majority of landlords want a service fee that is normally 5% of the monthly rent as well as a security deposit that can be up to 5% of the monthly rent. To minimize debt, make sure your budget considers these extra costs.
Identify Your Priorities
The location of your rental property can have a significant impact on your lifestyle and expenses because Dubai is known for its vast layout. The hidden cost of purchasing a property in the city center is the cost of transportation. To cut down on travel expenses, take into account how close an area is to your business, schools, and services.
Engage With a Real Estate Agent
In your property hunt, real estate agents can be of great assistance, but their services are not free. Agent commission fees in Dubai typically range from 2% to 5% of the annual rent. Make sure to account for this expense while making your choice.
Understand the Agreement
Examine the lease agreement in its entirety before signing it to look for any unstated maintenance and utility-related provisions. Due to the harsh climate, some houses in Dubai may have maintenance fees, and utility costs can be much higher. To prevent unforeseen financial responsibilities, make it clear who is accountable for these charges.
Seek Legal Advice if Necessary
Even while it's not always necessary, getting legal counsel can be quite important in complex leasing situations. Legal costs can be high, but they may shield you from future disagreements or unfavorable lease conditions. Think of it as a financial investment in defending your interests.
While looking for the ideal rental home in Dubai might be thrilling, it's important to be aware of any potential hidden expenses. You can make a cautious decision that guarantees a hassle-free and financially sound rental experience in the glittering city of Dubai.
Just creating a thorough budget, taking location and transportation costs into account, comprehending the role of real estate agents, carefully reading lease agreements, and seeking legal advice when necessary.
The best course of action is to speak with a real estate agent who is knowledgeable about the market to prevent yourself from any unnecessary expenses. They guarantee that you will save a large amount of money by providing the greatest guidance and total transparency.
Still, considering who to contact? Visit us at https://www.dubaihousing-ae.com/ to learn more.
