Dubai is a global attraction for individuals and businesses. Visiting Dubai as a tourist is one thing but living in the city of luxurious skyscrapers is a different ballgame. The process of renting a place in Dubai is rather a simple one but there are details you should be aware of. The cost of renting can vary depending on the type of place you choose. A villa, for instance, is going to cost more than an apartment. The overall cost of renting, however, isn’t limited to the amount of monthly rent. There’s more to it.
One major thing you should know is about the hidden cost of renting in Dubai. You cannot calculate your expenditures based on the rent alone. To help you manage your finances better with complete information on rent, we have compiled a list of the hidden costs of renting in Dubai. This information can also help you choose the right place to rent as per your budget.
The Unseen Cost of Renting in Dubai
Renting a property has its advantages. You can easily move to a new place without much hassle and in some cases you even get the maintenance covered. However, you should really look into the hidden costs that come with renting a place. Expenses that you are unaware of could eat up your savings.
Here are all the hidden costs of renting:
AGENCY FEES
If you are utilising the services of a real estate agency or brokerage, you have to pay them a fee. The agency fees is typically around 2 to 5% of the first annual rent. It’s a one-time fee for their service and you don’t have to pay them for renewal unless you hire them again. However, the amount of agency fee can vary based on the real estate agent’s discretion.
EJARI REGISTRATION FEES
Another additional cost of renting in Dubai is the Ejari registration fees. Ejari is a government program for authenticating rental contracts between tenants and landlords. The details of the Ejari fee are as follows:
- AED 100 – registration of Ejari contracts
- AED 10 – Knowledge fee
- AED 10 – Innovation fee
If you register through real estate services trustees Centres, the charges will be as follows:
- AED 120 + AED 95 as service partner fee + VAT for service partner fee
SECURITY DEPOSIT
Security deposit is another added expense to your average rent cost in Dubai. It is a one-time, refundable payment which you will get back eventually when you empty the premises at the end of your leasing contract. The security deposit is typically 5% for unfurnished and 10% for furnished places. In some instances, it can be equal to a month’s rent.
You are bound to receive the entire amount back but there could be deductions in case of damage to the property. One of the ways to get your security deposit refund in Dubai is to return the place in the similar condition you rented it to get the full amount.
DEWA DEPOSIT
Registration with Dubai Electricity & Water Authority (DEWA) is another additional expense you have to bear unless it is listed in the contract that the landlord will cover the utilities. For DEWA registration, you have to pay a refundable security deposit of AED 2000 for a flat and AED 4000 for a villa. Here are more details on the DEWA Deposit refund that you should know.
The details for the activation charges are listed below:
- Water and electricity connection (small metres) – AED 100
- Water and electricity connection (large metres) – AED 300
- Registration charges – AED 10
- Knowledge fee – AED 10
- Innovation fee – AED 10
DISTRICT COOLING DEPOSIT
Dubai has hot temperatures throughout and it is difficult to live without an air conditioner. As air conditioning can boost up your electricity bills, district cooling is available in Dubai that helps to cut down on power consumption for air conditioners.
There is a cost for district cooling which can vary upon the usage and size of the property. You also have to pay a refundable security deposit amount for registration. If it is mentioned in the contract then the tenant has to register with the cooling company serving the community. If you are low on budget, you can search for “chiller free” rental where the landlord pays for the air conditioning while you pay as per your usage. Moreover, understand the key differences between district cooling and chiller-free units to make an informed choice.
HOUSING FEE
The Dubai rent prices might not surprise you but these hidden charges can. Many tenants do not know about the housing fee in Dubai known as the Dubai Municipality Housing Fee. It is 5% of your annual rental amount and is paid in instalments. The amount is added to your monthly DEWA bills. Also, be mindful of the rental commission in Dubai, which may vary from property to property. To estimate the agency fee for renting property in Dubai, one should be aware of the real estate agent charges.
MOVING COST
Whether you are moving from a different country or changing your place within the city, you need to hire moving companies in Dubai. This can also add to your cost of renting in Dubai. Home moving could be a big expense depending on the size of your property and your packaging.
If you are moving into a rental villa in Dubai, you’ll probably have more luggage, hence a greater expense on moving. The expenses can also increase on additional services such as insurance, storage, and unpacking.
Additional Future Costs of Renting in Dubai
Once you have completed all the formalities and moved into your rental apartment in Dubai, villa or house, there still remain some future expenses you should consider. Here are a few additional renewal charges you have to bear once their validity expires.
INCREASED RENT
Your landlord can increase the rent when renewing your tenancy contract. The increased rent will also increase the housing fee which is set at 5% of your annual rent.
AGENCY FEES
If you involve an agent for the renewal of your tenancy contract then you have to bear the agency fees too. Besides additional costs, there are many noteworthy benefits of hiring a professional property agent.
EJARI RENEWAL FEES
All your rental contracts should be registered with Ejari. This also includes contract renewals. Once your tenancy contract has expired, you have to apply for the Ejari renewal by paying the fee again.
FAQs
Why renting in Dubai is so expensive?
Dubai is known for its state-of-the-art lifestyle with an array of business and employment opportunities. All these factors contribute to the high demand of property in the emirate leading to expensive rents.
Is 25k AED a good salary in Dubai?
Those earning between AED 25k and AED 30k can buy an affordable villa in Dubai. It is how much you need to earn to buy property in Dubai, according to an estimation.
This was all on our guide about the hidden cost of renting in Dubai. Renting has its perks and it is preferable for people who want to save some cash. While the hidden expenses can be surprising at times, Dubai as a whole offers top-quality services and equal-employment opportunities to everyone. That said, you should consider all these expenses when renting a property in Dubai. Knowing about the expenses can help you manage your budget better. Keeping all these things in mind, you can make a better decision when renting a property in Dubai.
To expand your search for rental property in Dubai, you should check out the following properties available for rent:
On another note, if the idea of owning a property looks promising to you and you can afford it, you can browse through the following:
Stay tuned to UAE’s top property blog for learn more about hidden rent costs in Dubai.
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