Why to buy a property in Dubai?

Why to buy a property in Dubai?
Real Estate Weathi Logo
August 25, 2020

This question is more relevant today than ever before with buyer-friendly property rates, but there is still confusion among prospective investors on location hotspots, possible investment returns, and short and long-term financial implications.

Everyday people buy homes when they are financially well off because they want to have a place to set their roots in or because they see homeownership as an investment that can grow. Similarly, people rent all the time for convenience and minimal responsibility, even if they would have gained a bigger income over time if they owned a house.

This article discusses the advantages and disadvantages of buying or renting a house, to help make your choice easier.

Buying - the Advantages:

·        Rental Income: The biggest advantage of owning a house is that you can rent it out to tenants, it will provide you with an additional source of income. For example, if you own an house that you rent for AED 10,000 a month, and suppose the house is rented out throughout the year then you will receive a tidy sum of AED 120,000. Those monthly rent checks will go directly to your bank account, offsetting most expenses you might have incurred that year. It's hard to argue with a strong income source like that.

·        Increasing Property value: If you own a property, you can benefit from the increase in the value of the property over time due to increasing property rates in the area, even if the property does not undergo any renovations. But this is a variable aspect, as it relies heavily on the area that the property is located.

·         Freedom:  When you purchase a house, it becomes your legal property, which gives you more flexibility to use it without limitations sometimes imposed by the Landlord. You can alter the house, including changes in design, landscaping, and renovations, to match your needs and style.

Buying - the Disadvantages:

·        Financial Responsibilities: Being a house owner comes with immense financial responsibilities, including mortgage payments and routine house maintenance. Some of the other costs of house ownership typically include rates, taxes, insurance, and renovations for which the owner is responsible.

·        Fluctuating Market: Homeowners run the risk of making no profit from a resale. This is often due to economic conditions such as a recession or rising interest rates, or its location becoming less attractive.

·        Minimal Flexibility: When it comes to being able to move home, a homeowner has lesser flexibility than a tenant who rents in the short term. A tenant can leave the house after giving a month of notice, but a house owner likely depends on selling their house before being able to buy a new one.

Renting - the Advantages:

·        Flexibility: Renting a property makes it more flexible than owning a home and this can be done with the help of classified ads websites in UAE. This is ideal for those who could face sudden changes, like the relocation of work. Renting does not require a tenant's long term commitment and is the best option if you do not wish to stay for a long time in one place.

·        No Financial Burden: If you are a renter you can avoid spending money on upfront fees such as homeowner insurance, property tax, or maintenance costs. The only insurance a tenant needs is to protect the contents of the house, while the homeowner insurance and all upkeep on the property is the responsibility of the landlord.

·        Access to Amenities: Another financial benefit to renting is that you can have access to luxurious amenities such as a gym or swimming pool, which could have cost a lot if you wanted a property with such amenities. As a tenant, you also don’t incur any expenses on the maintenance of such facilities, as it is the responsibility of the property owner.

Renting - the Disadvantages:

·        Increasing Rent Rates: As the property rates in your locality increase, you might face a sudden increase in your monthly rent. Once your landlord raises the rent, you have a few things to consider before you make a decision, such as your finances and the total budget. Will you be able to afford rent, once it increases?

Restrictions: Most landlords do not allow any renovations or major decorative changes to their units or homes, such as changing countertops or painting walls. Certain apartments often do not accommodate animals and have limits on the number of people on a lease. When you are living in your own house you are not subjected to these restrictions.

Why to buy a property in Dubai?
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