Informative Related to Hidden Costs of Renting a House in Dubai

Renting a house in Dubai can be a great opportunity to benefit from the city’s vibrant culture and booming economy. However, it is important to consider the hidden costs of renting a house in Dubai. These costs can include utilities, security deposits, agency fees, and maintenance costs that can significantly increase the total cost of rent in Dubai. in addition, while the cost of rent in Dubai is relatively low compared to other cities, the hidden costs associated with renting a house in Dubai can make it difficult to stick to a budget. therefore, it is important to understand the hidden costs of properties for rent in Dubai before signing a lease.

Additional Hidden Costs of Renting an Abode in Dubai

When looking for a place to rent in Dubai, one can find good value for your money. From lavish villas to exquisite apartments, there is a wide variety of properties to choose from. Before signing a lease, it’s important to consider the hidden costs of renting a house, such as service charges, deposits, and furnishings. 

So, let’s have a look at the top additional hidden Dubai rent costs that come coupled with renting a house in the emirate. 

Learn about each of these hidden costs of renting in Dubai in brief below. 

• Agency Fee

If you are looking to rent in Dubai, you may need to enlist the help of a real estate agency. This comes with an additional charge, which is the agency fee. This fee is calculated as a percentage of your total annual rent, usually between 2% and 5%. However, the exact amount may vary, depending on the agent.

• Ejari Registration

Renting in Dubai comes with an extra cost – Ejari registration. Ejari is a Government-operated programme that manages Dubai’s tenancy contracts, and the tenant usually pays for the registration cost. The charges for the registration through the Ejari application and system as stated below:

• • Registration of Ejari: AED 155 + VAT
  • Knowledge Fee: AED 10
  • Innovation Fee: AED 10

The cost of registration through Real Estate Services Trustees Centers is:

• • Registration Fee: AED 219.5 + VAT
  • Knowledge Fee: AED 10
  • Innovation Fee: AED 10

• Housing Fee

In addition to the rent, the Dubai Electricity and Water Authority (DEWA) bill includes a fee known as the Dubai Municipality housing fee. This fee is a 5% levy of the annual rent paid monthly and is usually unknown to tenants before they sign a lease agreement. This is an added cost of renting in Dubai that must be factored into the financial arrangements.

• Security Deposit

In addition to your first rental payment, you must also pay a refundable, one-time security deposit to your landlord. This amount typically ranges from 5% of the total cost for an unfurnished property to 10% for a furnished one, or alternatively, it can be the equivalent of a month’s rent. when you vacate the flat, the security deposit will be returned to you; however, the landlord might subtract a specific amount to cover any painting or minor repairs that may be necessary. to guarantee the return of your security deposit, it is essential to make sure that the property is kept in the same condition that you received it in.

• DEWA Deposit

Tenants should take into consideration the hidden rental charges in Dubai when calculating their rental budget. This includes the DEWA connection deposit, which is AED 2,000 (refundable) for flats or apartments for rent in Dubai and AED 4,000 for villas. Additionally, a non-refundable fee must be paid for DEWA services. The charges of activation for a new premise involve:

• • Electricity and Water Connection (Large Meters): AED 300
  • Electricity and Water Connection (Small Meters): AED 100
  • Registration: AED 10
  • Innovation Fee: AED 10
  • Knowledge Fee: AED 10

• District Cooling

In many apartments located in Dubai, district cooling systems are used in order to reduce the consumption of electricity, particularly when it comes to air-conditioning. Companies like Emicool and Empower provide these district cooling services to Dubai’s apartment communities. In some cases, tenants may be required to register with any district cooling company in order to use the service. and for the same, tenants must provide a refundable security deposit. For example, Empower asks for a deposit of AED 3,000 (refundable)  for villas and AED 2,000 (refundable) for apartments. 

• Moving Cost

Last but not least, when relocating to a new rental house in the emirate, you must bear in mind the cost of moving. This cost is standard for most residents to hire professional packers and movers to assist them with their move. The average price for such services when moving a 1 or 2-bedroom apartment is usually between AED 2,500 and 1,500. The moving cost can increase depending on the size of the property and any other services required, such as storage, unpacking and insurance.

Calculating the Cost of Renting a House / Apartment / Flat in Dubai

In order to help understand each of the above rental charges better, we have included an example below of how the rent of a house in Dubai is estimated. 

Example: The cost of renting a two-bedroom apartment in Dubai Marina starts at AED 90k.

If you pay your rent on a quarterly basis, you must pay an initial cheque of AED 22.5k. Additionally, you need to pay a 3% agency fee of AED 2,700 and an Ejari registration fee of AED 350. The landlord will also require you to pay a security deposit of AED 7,500, a DEWA deposit of AED 3,000 and moving costs of AED 3,500. The bare minimum charge for renting a house in Dubai in this price range would be AED 39k.

So, when you are looking to rent a property in Dubai, it is important to be aware that there may be additional costs apart from the agreed-upon price. Therefore, before signing a tenancy contract, you should read through it carefully and make sure to note any other expenses that may be incurred. Also, remember that it’s important to be aware of all these extra costs so that you can budget accordingly and make sure you are able to pay them.

Additional Costs for Renewing the Tenancy Contract in Dubai 

Renewing a tenancy agreement in Dubai is a relatively straightforward process as long as all the necessary steps are followed, and the required documents are provided. The process is typically handled by the tenant, who must ensure they have all the correct paperwork and the landlord’s signature before submitting the forms to the Dubai Land Department.

Also, before deciding to renew a tenancy agreement, it is important to consider the terms of the agreement and the additional charges involved.

• Rent Increase

When it comes time to renew the tenancy contract, the landlord may increase the rent. This increase in rent would also result in a slight rise in your Dubai Municipality housing fee, which is estimated as 5% of the yearly rent.

• Agency Fees

If you choose to use an agent to help with the renewal of your tenancy contract in Dubai, you should be aware that there will be an additional charge involved. This cost is usually referred to as the agency fee and is paid to the agent for their services in helping to arrange the renewal.

• Ejari Renewal

When you renew your tenancy contract, which usually happens annually, you will also need to renew your Ejari, meaning you will incur extra Ejari renewal fees.

Conclusion

Renting a house in Dubai can be an expensive endeavour. There are a lot of hidden costs associated with it that many people do not consider. From paying for the security deposits to DEWA Deposit, these costs can add up quickly. It’s therefore important to consider these costs when budgeting for a new home in the emirate and to try to save as much money as possible in the process. With a bit of research and planning, you can find a great deal and make your renting experience in Dubai a great one.

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