How Much Money Do You Need To Buy A Rental In Dubai?

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How Much Money Do You Need To Buy A Rental In Dubai?

18/12/2024

To understand how much money you need to buy a rental in Dubai, let's speak about its real estate prices at first. Of course, prices vary from community to community and depend on area, property type, and its size. For example, apartment studios have the lowest price.

Here we listed where ready apartment studio prices start form in different affordable areas in Dubai in 2019:

Jumeirah Village Circle – AED 250,000
Dubai Sports City – AED 265,000
Dubai Silicon Oasis – AED 280,000
Discovery Gardens – AED 310,000
Jumeirah Village Triangle–AED 370,000.

With each unit, no matter its price and location, you have two options – buying with your own money or financing. Therefore, let's do detailed research for each case separately to get the complete picture.

Buying with your own money

If you decide to purchase a rental using only your savings and without any liabilities, you need to have all the amount of money needed for the deal.

Though the lowest price is AED 250,000, it doesn't mean 250,000 dirham will cover all your expenses. So, do not forget about closing costs. They include at least:

Transfer fee – 4% of property price
Admin fee – AED 580
Registration fee – AED 2,100
Agency fee – usually 2% of property price.

Hence, to buy an apartment studio of AED 250,000, prepare to spend least AED 267,680. To clarify, in addition to studio price, you need to pay AED 17,680 for closing costs:

AED 10,000 for Transfer fee
AED 580 for DLD Admin fee
AED 2,100 for Registration fee
AED 5,000 for Agency fee.

Note, Registration fee of AED 2,100 is charged only for properties that cost less than AED 500,000. However, if the property cost more than AED 500,000, you need to pay AED 4,200 for its registration.

To make your calculation easier, we provide you with a general formula of your total costs for property below AED 500,000:

Your total costs = property price + 6% of property price + AED 2,680 (AED 4,780 for property above AED 500,000).

Using a financing scheme

If you decide to purchase a rental with financing, you need to cover your down payment as well as closing costs.

Typically, banks require no less than 25% of property value for down payment. For example, for an apartment studio of AED 250,000 your deposit must be at least AED 62,500.

With mortgage deals at place, your closing costs are higher than when you buy a rental with your own money. Your expenses here include:

Transfer fee – 4% of property price
Admin fee – AED 580
Registration fee – AED 2,100
Mortgage registration – 0.25% of the loan
Another Mortgage registration fee – AED 290
Property valuation – at least AED 2,625
Agency fee – usually 2% of property price.

Hence, to buy an apartment studio of AED 250,000 with financing, you need at least AED 17,680 to cover your closing costs:

AED 10,000 for Transfer fee
AED 580 for DLD Admin fee
AED 2,100 for Registration fee
AED 758.75 for Mortgage registration
AED 2,625 for Property valuation
AED 5,000 for Agency fee.

The rule of charging AED 4,200 for registration the unit of AED 500,000 and more are also valid here.

So, to calculate the amount of money you need to buy a rental in Dubai with mortgage scheme, use the following formula:

The needed amount of money = 31% of property price + 0.25% of the loan + AED 5,595 (AED 7,695 for property above AED 500,000).

However, keep in mind in all mortgage transactions the question about money you posses now is not the only one. Here the question about how much you earn arises as well.