What’s included in your rent: Understanding Dubai rental costs
Renting a property in Dubai involves more than just the monthly rental payment. To budget effectively and avoid unexpected expenses, it’s essential to understand both the inclusions and additional costs associated with your rental agreement. So, without further ado, here are the obvious and hidden rental costs in Dubai and tips to minimise rental expenses!
Common Inclusions in Rental Costs in Dubai
While inclusions can vary based on the landlord and property type, many rental agreements in Dubai encompass:
Basic Rent
The basic rent is the core amount you pay to occupy the property. This fee grants you the right to live in the unit but often excludes additional services or utilities.
Basic Utilities
Some rentals, especially in serviced apartments or certain communities, include utilities such as water and electricity. However, this is not universal, so confirming with your landlord is crucial.
Maintenance
In many cases, landlords cover general maintenance of the building’s common areas, such as lobbies, elevators and recreational facilities. However, the responsibility for in-unit maintenance can vary. It’s essential to clarify with your landlord whether issues like plumbing or electrical repairs within your apartment are covered or if they fall under your responsibility.
Tenants are typically responsible for minor upkeep, usually costing below AED 500, but this can vary depending on the lease agreement.
Additional Cost of House Rent in Dubai
While drawing up estimated Dubai apartment rent costs, it’s important to look into additional costs that you might incur during your tenancy. Here’s a list of hidden fees you are likely to face when renting apartments in Dubai.
Security Deposit
Landlords commonly require a security deposit, usually equivalent to 5% of the annual rent for unfurnished properties and 10% for furnished ones. This deposit is refundable at the end of your tenancy, provided there are no damages beyond normal wear and tear.
Housing Fee
A lesser-known cost for tenants in Dubai is the Dubai Municipality housing fee. This amounts to 5% of your annual rent and is billed monthly through DEWA (Dubai Electricity and Water Authority).
Agency Fees
If you use a real estate agent to find your rental property, be prepared to pay an agency fee, typically around 5% of the annual rent. To ensure you’re dealing with reputable agents, consider using platforms like TruBroker™ by Bayut, which recognises and rewards agents who excel in responsiveness and listing quality.
DEWA Deposit
Another hidden cost is the DEWA deposit, which is required to set up electricity and water services. The deposit amounts are:
- AED 2,000 for apartments
- AED 4,000 for villas
Additionally, DEWA charges a non-refundable service fee:
- Electricity and water connection (small metres): AED 100
- Electricity and water connection (large metres): AED 300
- Registration fee: AED 10
- Knowledge fee: AED 10
- Innovation fee: AED 10
Air Conditioning
Many apartment communities in Dubai use district cooling systems to lower electricity costs for air conditioning. Companies like Empower and Emicool provide these services.
If your rental contract requires district cooling registration, you’ll likely need to pay a refundable security deposit to the service provider—another cost to factor into your budget.
Parking
If you own a vehicle, parking is a crucial consideration. Many residential buildings offer dedicated parking spaces, but the inclusion of a parking spot isn’t guaranteed. Some landlords include parking in the rent, while others may charge an additional fee. Ensure you understand the parking provisions and any associated costs.
Ejari Registration
Ejari is a mandatory registration system for all rental contracts in Dubai, usually paid by the tenant. Registering your tenancy contract with Ejari is essential, as it’s required for various services, including setting up utilities and sponsoring family visas.
Here are the applicable charges:
- Ejari registration: AED 100 + VAT
- Innovation fee: AED 10
- Knowledge fee: AED 10
Moving Costs
Moving into a new home in Dubai comes with its expenses. Many residents hire professional packers and movers in Dubai to handle the process. The average moving cost in Dubai is AED 1,500 to AED 2,500 for a 1 or 2-bedroom apartment. But costs can go up if you’re moving into a larger space or need extra services like unpacking, storage or insurance.
Tips for Prospective Tenants
- Before signing a lease, always confirm with your landlord or property manager what is included in the rent to avoid any misunderstandings.
- Carefully review the tenancy contract, paying close attention to clauses regarding maintenance, utilities and additional fees to prevent unexpected costs.
- Be prepared for initial expenses, including security deposits, agency fees and utility deposits, as these are typically required upfront.
- Keep in mind that some costs, such as agency commissions or minor maintenance responsibilities, may be negotiable. So, it’s worth discussing with your landlord.
By understanding these components and planning accordingly, you can navigate the Dubai rental market more effectively and ensure a fruitful tenancy experience.
FAQs
What factors influence the rent in Dubai?
The average rent cost in Dubai depends on several factors, including:
- Size of the property
- Layout of the apartment or villa
- How old is the property – fixtures and fittings
- The area where your residence is located
- Access to different lifestyle amenities
- State of the residence – furnished apartments have a higher asking rent.
- How well the real estate market is faring
What expenses can I expect if I renew my rental contract?
For those wanting to learn about rental costs in Dubai during a tenancy contract renewal must know that:
- Rent increases: RERA provides guidelines on permissible rent hikes based on the average rental rates in your area. You can use the RERA Rental Increase Calculator to determine if a proposed increase is within the legal limits.
- Agency fees: If you choose to involve a real estate agent for the renewal process, agency fees will be an additional cost.
- Ejari renewal: Ejari must be renewed each time your tenancy contract is extended, usually once a year. This means you’ll need to cover the Ejari renewal fees as well.
What is the real estate agent commission in Dubai?
Real estate agents in Dubai usually charge a 5% commission on the annual rent for rental properties. In some cases, they may opt for a flat fee of AED 5,000 instead.
Who is responsible for maintenance in a rental property?
According to RERA tenancy law, landlords are responsible for apartment repair costs unless stated otherwise in the lease agreement.
This concludes our guide to the cost of rent in Dubai. If you are wondering how well the Dubai real estate market is faring, you only need to look at Dubai transactions. The page shows an increase in rental volume and value over one year.
Planning to renew your lease or rent a new home in Dubai? Staying informed about rental price trends can help you negotiate better deals and avoid overpaying. The Smart Rental Index by DLD is a great tool to check if your landlord’s proposed rent increase is fair and within RERA guidelines. Before signing your tenancy contract, use this index to compare rental prices in your area and make smarter financial decisions.
Want more information on the hidden cost of renting in Dubai? Stay tuned to MyBayut!
