What are the hidden costs of renting in Dubai?

• Renting a New Home
• Estimated Cost
• Renewing the Contract
• FAQ

Whether you are new to Dubai or have lived in the emirate for a long time, you may be unaware of the additional charges associated with property rents. Learning about this extra expenditure can assist you in making the best decision and getting a better handle on your finances. So, without further ado, let’s explore the hidden cost of renting in Dubai.

Hidden costs of renting in Dubai – An overview

You can find great value for your money when renting in Dubai. It is easy to find everything from elegant villas to luxurious apartments. However, before signing the lease, consider the additional costs to rent properties in Dubai. This can include everything from the cost of renting an apartment in Dubai to a villa.

Most tenants only think about paying rent in Dubai. But there are many hidden costs of renting in Dubai that you should know.

Rental Services	Cost
Rental Services Agency Fee	Cost 5% or above (Please speak to your agent/agency for exact details)
Rental Services Ejari Registration	Cost Varies according to method
Rental Services Housing Fee	Cost 5% of annual rent paid in 12 parts
Rental Services Security Deposit	Cost Furnished Properties: 10%, Unfurnished properties: 5% (Or, equivalent to a month’s rent)
Rental Services DEWA Deposit	Cost Apartments AED 2,000 | Villa AED 4,000 | AED 130 payable to DEWA
Rental Services District Cooling	Cost Consumption Charge + Demand Charge + Fuel Surcharge
Rental Services Moving Cost	Cost AED 1,500 to AED 2,500

Agency fees

Those opting for real estate agencies in Dubai must pay the agency fees. Remember that while 5% is the norm, it can be higher based on the agent’s discretion. This is an additional cost of renting in Dubai.

• Typically 5% of your annual rent.

Ejari registration

Another hidden cost of renting in Dubai is Ejari registration. This is a government-run programme that regulates all tenancy contracts in Dubai. Typically, the tenant pays for the cost of the registration.

Charges via the application and the system are as follows:

• Registration of Ejari: AED 100 plus VAT
• Innovation fee: AED 10
• Knowledge fee: AED 10

The registration cost through Real Estate Services Trustees Centers is given below:

• Registration fee: AED 219.5 plus VAT
• Innovation fee: AED 10
• Knowledge fee: AED 10

Housing Fee

Talking about the hidden costs of renting property in Dubai, only a few tenants know about the Dubai Municipality housing fee. This amounts to 5% of your annual rent and is paid monthly through the Dubai Electricity and Water Authority (DEWA) billing system.

Security Deposit

Apart from the initial rental cheque, you must make a one-time, refundable security deposit to the landlord. This is usually around:

• 5% for unfurnished
• 10% for furnished properties.

Alternatively, the security deposit could be equivalent to a month’s rent.

This amount is refunded when tenants vacate the property. However, landlords may deduct a certain amount from the security deposit for painting and minor repairs.

One of the most effective tips to get your security deposit back is to ensure that you hand back the property in a similar condition to when you received it. This is one of the more important hidden costs of renting a house in Dubai.

DEWA Deposit

Tenants should also consider the hidden costs of renting in Dubai such as the refundable deposit to set up the DEWA connection. For the set-up, they must pay AED 2,000 for rental apartments in Dubai and AED 4,000 for renting a villa in Dubai. Remember this hidden cost of renting in Dubai when calculating your rental budget.

There is also a non-refundable fee that you have to pay for DEWA services. Following are the activation charges for new premises:

• Electricity and water connection (small meters): AED 100
• Electricity and water connection (large meters): AED 300
• Registration: AED 10
• Knowledge fee: AED 10
• Innovation fee: AED 10

District Cooling

Many apartment communities in Dubai use district cooling systems to reduce electricity consumption because of air-conditioning. District cooling services are provided by companies like Empower or Emicool in Dubai.

If stipulated in the contract, tenants must register with the district cooling company serving their community, which often necessitates a refundable security deposit. Add this to your list of hidden costs of renting an apartment in the emirate.

Moving Costs

When renting a new home in Dubai, you must add moving costs. Most residents hire movers and packers in Dubai when moving to a new home. The average moving costs in Dubai range between AED 1,500 to AED 2,500 for a 1 or 2-bedroom apartment. This can increase if you move to a larger home or require additional services, such as unpacking, storage and insurance.

ESTIMATING THE COST

To put this list into perspective, let’s look at the initial cost of renting a 1-bed flat in Dubai Marina, with a starting price of AED 54k.

If your rent is paid quarterly, your initial cheque would be AED 13.5k. Let’s say the agency fee is 3%. Then, you would have to pay an additional AED 1,620, while the Ejari registration fee will be around AED 219. If the security deposit is equivalent to a month’s rent, you must pay AED 4,500 to the landlord upfront.

Similarly, the DEWA deposit would be AED 2,000, while the moving costs would be around AED 2,000. This brings your bare minimum initial expense of renting a property in Dubai in this price range to just under AED 24k.

As you can see, there can be substantial expenses when renting in Dubai beyond the agreed-upon amount. Make sure to go over your tenancy contract with a fine-tooth comb to find out if there are any additional costs that you might face. This will help you be aware of any hidden costs of renting in Dubai.

The additional costs for renewing your tenancy contract in Dubai

When renewing a rental contract in Dubai, there will be fewer additional costs.

You should be aware of these charges associated with renewing a tenancy agreement.

Maintenance

This is among the hidden costs of renting in Dubai that is often missed by new tenants. The property that you have chosen may need some repairs before it is ready for you to move in. Make sure that you are aware of service charges in Dubai before you commit to a home. The charges for villas and apartments differ.

Rent increase

The landlord may try increasing the rent during the renewal of the rental agreement. You can get an estimated annual rental increase by using the RERA Dubai calculator. This is among the many things to consider during tenancy contract renewal in Dubai.

In this case, you would also see a slight increase in your Dubai Municipality housing fee, which is 5% of the annual rent. Make sure you are also aware of tenancy contract renewal costs in Dubai.

Agency Fees

If you involve an agent in the renewal process, then one of the additional expenses of renewing the tenancy contract in Dubai you can expect is the agency fee. This may amount to:

• 7 to 10% of the yearly rent for commercial property
• 5% of the yearly rent for residential property

Ejari renewal

As mentioned earlier, Ejari must be renewed every time your tenancy contract is up for renewal, which in most cases is annual. Thus, you will face additional Ejari renewal fees when renewing your tenancy contract.

• Renewal fee: AED 155 (excluding VAT)

It is crucial to read your tenancy contract thoroughly before renewing your lease or renting a new property. Make sure you have a clear understanding of all the charges that you will be responsible for. Keep in mind that sometimes landlords may pass on maintenance fees charged by developers to tenants for payment. Therefore, it is essential to be aware of all the charges to avoid any unexpected expenses in the future.

Remember, these additional expenses of renting in Dubai are just some of the key factors to consider. Make sure to account for other variables that may help you save money in the long run, such as your home’s proximity to public transport and essential amenities. Those with school-going kids must consider their child’s commute to school when deciding between renting a new property and renewing the contract.

Properties near your points of interest can be easier to find with the Search 2.0 feature on Bayut. The tool uses AI and Machine Learning to help users conduct online searches that are more pertinent to their daily routines.

FAQS ABOUT THE HIDDEN COST OF RENTING IN DUBAI

How much is real estate agent commission in Dubai?

An agent’s commission is typically 5% of the annual rent for renting properties. Some may even charge a flat fee of AED 5,000.

Who pays for maintenance on a rental property?

As per RERA tenancy law, apartment repair costs are the landlord’s responsibility, unless agreed otherwise in the lease contract.

How much does it cost to rent in Dubai?

The cost of rent in Dubai can vary widely depending on your desired home’s location, property type and features. For instance, the average rent of a 1-bed flat in Dubai can range from AED 19k to AED 850k annually. The hidden costs of house rentals in Dubai are also based on multiple factors. On that note, apartment hunting in Dubai may also incur some expenses like the fuel you used to visit each prospect.

What is the total agency fees for renting in Dubai?

The standard norm for agency fees when renting in Dubai is 2% to 5% of your annual rent. However, this can vary depending on the agent, so know this early on.

Should the chiller cost be included in your rent?

The landlord is typically responsible for the cost of the chiller, while the tenant pays the cost of electricity consumption. For properties advertised as ‘chiller-free,’ the landlord will bear the chiller fees. However, landlords sometimes pass this expense on to the tenants in exchange for a lower annual rent.

That’s a wrap to our guide to the hidden cost of renting in Dubai. For more information, you can always refer to the Dubai Rental Law, which sets out clear rules and rights of tenants.

In case of any disagreement with your landlord, you can file a rental dispute in Dubai. If you’re new to the emirate, check out our step-by-step guide to renting in Dubai, from finding the perfect home to moving in.

Want to call Dubai your permanent residence? Why not consider buying your own home in the city? Know the costs of buying property in Dubai before you commit.