Buying Vs Renting a house?
It is advisable for expats to check for the pros and cons of both options and make a decision that aligns with their futuristic plans.
Been in Dubai Long enough and tired of heavy tax? Wondering whether buying a house in UAE is worth it? Well, today i am going to give you the pros and cons of both scenarios and hope by the time you finish reading this article you will be in a clear head space and drive to a decision.
For those expats who like to plan for the future and can afford investing in a house, this article will give you a clear direction and know what to expect.
Investing in Real estate is one of the most lucrative industries you can almost never go wrong with. Whether buying or selling property, real estate will always yield good return but is relative to location, purpose and functionality of the property acquired.
Pros of buying
Expats who are staying in UAE on a long-term or want something more permanent then buying a house would be the best choice for you.
It is better to own property, having something to call your own for a lifetime is much more rewarding and eases “rental stress”. If an expat is not in a position to, you can start saving now in order to own your dream house sometime in the near future. Anyone is capable if disciplined, committed and patient.But for those who have money in abundance the time is now. Real Estate secures and grows assets over time.
Regardless of where you stay, expat residents in the UAE say that at least 30-40% of their income goes to paying rent. If an annual analysis is conducted you will realize that paying rent is more expensive than buying a house. There are more perks in investing in a house:
- Sense of freedom
Once you purchase a house or property, you are at liberty to customize it your way, from the interior design, color scheme, proportions, landscape etc it brings a sense of belonging and motivation knowing its in your name and that your efforts bore fruits after the sacrifices and hard work, finally!
- Avoid “rental stress”
Paying rent has pressure, you will be expected to meet the rent monthly or else face eviction and more often than not without proper structure in place it tends to lead to H.P.B (High Blood Pressure). Buying a house relieves you of all this stress and aids in mental calmness.
- Yields returns
If you ever decide to sell your property or house later in the future, It’s more likely that you will get good returns or a good price value for your house as property tends to appreciate over time.
Cons of buying
Owning a house has financial pressure to keep working in the UAE until the mortgage is paid off as a big chunk of your income goes to mortgage payment which can be approximately 35% of the purchase value (according to contract) therefore budgets need to be set in place for upfront payments with addition of everyday expenses.
- Change in market dynamics
Sometimes It is unclear where the Dubai market is headed, Like any other industry the market has its ups and downs therefore one should be prepared at all times because fluctuation is rampant.
- Mortgage fluctuating
The interest may change according to contract, developers and market season and laws so if buying a house one should put in place structures and strategies to make payments regardless.
Pros of renting
- Cheaper option
Renting is very affordable and realistic because you get to leave at any given point unlike buying which ties you down. Renting gives you peace of mind as you can adjust and adapt accordingly with the situation at hand. It also gives you more exposure and diversity.
- No responsibility
Renting does not put constraints on you to take care of the house/property. You don’t need to pay owners association fees and dues or incur maintenance costs.
Cons of renting
- No sense of belonging
Everytime the feeling of lack of belonging or enthusiasm will overcome you and sometimes may lead to depression especially if moving from place to place often. No stability whatsoever and you cannot do any renovations to the house because it doesn’t belong to you. Hence you need to abide by the leasing policies.
- Waste of funds
Renting is more costly than buying if you make an annual analysis as you spend more instead of saving and investing, you end up incurring more costs.
- Uncertain rental increment
The landlords may decide to increase rent as they wish because they are at liberty to do so. This will inconvenience the rentee as it may disorganize you and face eviction failure to comply.
So when deciding to either buy or rent a house, make sure you conduct a personal thorough research before and carefully consider and evaluate what is important; Are your wants more important than your needs or vice-versa? A question everyone should ask themselves before making any purchase. Hard earned money is on the line so you need to familiarize yourself with the market. Food for thought!