You may be unaware of the additional costs related with property rents if you are new to Dubai or have lived in the emirate for a long time. Knowing about this extra expense will help you make the best option and have a better understanding of your finances. Thus, without further ado, let us look into the hidden costs of renting in Dubai.
OVERVIEW OF THE ADDITIONAL HIDDEN COSTS OF RENTING IN DUBAI
By renting in Dubai, you might get a lot for your money. Everything from exquisite houses to opulent flats is easily accessible. Consider the additional expenditures of renting a house in Dubai before signing the contract.
| Rental Services | Cost |
| Agency Fee | 2-5% of annual rent |
| Ejari Registration | Varies according to method |
| Housing Fee | 5% of annual rent paid in 12 parts |
| Security Deposit | Furnished Properties: 10%, Unfurnished properties: 5% (Or, equivalent to a month’s rent) |
| DEWA Deposit | Apartments AED 2,000 | Villa AED 4,000 |
| District Cooling | Consumption Charge + Demand Charge + Fuel Surcharge |
| Moving Cost | AED 1,500 to AED 2,500 |
FEES FOR AGENCY
People who use the services of Dubai real estate agencies must pay agency fees. This is an additional expense of renting in Dubai, usually ranging from 2% to 5% of the annual rent. However, keep in mind that, while this is the standard, it might vary depending on the agent’s discretion.
REGISTER FOR EJARI
Ejari registration is another hidden cost of renting in Dubai. This is a government-run program that governs all tenancy agreements in Dubai. Normally, the renter is responsible for the expense of registration.
Prices for using the app and the system are as follows:
- Registration of Ejari: AED 155 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
FEE FOR HOUSING
The Dubai Municipality housing charge is another hidden cost of renting in Dubai that few renters are aware of. This is equivalent to 5% of your annual rent and is paid monthly via the Dubai Electricity and Water Authority (DEWA) billing system.
DEPOSIT FOR SECURITY
Apart from the first rental payment, you must provide the landlord with a one-time, refundable security deposit. This is typically 5% for unfurnished properties and 10% for equipped properties. The security deposit might also be equal to one month’s rent.
When renters quit the property, this sum is reimbursed. Landlords, on the other hand, may deduct a portion of the security deposit for painting and minor repairs. One of the most successful ways to get your security deposit returned is to return the property in the same condition as you acquired it.
DEWA DEPOSIT
Renters should also consider Dubai’s hidden rental costs, such as the refundable deposit required to set up the DEWA connection. They must spend AED 2,000 for rental flats in Dubai and AED 4,000 for renting a home in Dubai for the setup. While estimating your rental budget in Dubai, keep this hidden expense in mind.
You must additionally pay a non-refundable charge to use DEWA services. The activation fees for new premises are as follows:
- Electricity and water connection (small meters): AED 100
- Electricity and water connection (large meters): AED 300
- Registration: AED 10
- Knowledge fee: AED 10
DISTRICT COOLING
District cooling systems are used in several residential developments in Dubai to minimize power usage due to air conditioning. In Dubai, district cooling companies such as Empower or Emicool do this.
Tenants must register with the district cooling firm servicing their neighborhood if specified in the contract, which frequently requires a refundable security deposit. Empower, for example, charges a refundable deposit of AED 2,000 for flats and AED 3,000 for villas.
COSTS OF MOVING
Moving fees must be included in when renting a new house in Dubai. Most residents in Dubai use movers and packers while shifting to a new property. Moving charges in Dubai range from AED 1,500 to AED 2,500 for a one or two-bedroom flat. Cost may rise if you relocate to a larger property or require additional services such as unpacking, storage, or insurance.
PREDICTING THE COST
To put this list into context, consider the initial cost of renting a 1-bed flat in Dubai Marina, which starts at AED 54k.
If you pay your rent quarterly, your first cheque will be AED 13.5k. If the agency cost is 3%, you will need to pay an extra AED 1,620, while the Ejari registration price will be roughly AED 219. If the security deposit is equal to one month’s rent, you must pay the landlord AED 4,500 in advance.
Similarly, the DEWA deposit would be AED 2,000, and relocation expenses would be roughly AED 2,000. This takes the initial cost of renting a house in Dubai in this price bracket to slightly under AED 24,000.
As you can see, there might be significant additional costs when renting in Dubai over the agreed-upon price. Be sure to check over your tenancy contract with a fine-tooth comb to find out if there are any hidden fees.
THE EXTRA COSTS OF RENEWING YOUR DUBAI TENANCY CONTRACT
There will be less extra expenses while renewing a rental contract in Dubai. You should be aware of these fees while renewing a lease agreement.
RENT GOES UP
While renewing your tenancy contract in Dubai, the landlord may raise the rent. In this instance, your Dubai Municipality housing charge, which is 5% of the annual rent, would also rise somewhat.
FEES FOR AGENCY
If you employ an agent in the renewal procedure, the agency charge is one of the additional costs of renewing the lease contract in Dubai.
RENEWAL OF EJARI
As previously stated, Ejari must be renewed each time your tenancy contract comes up for renewal, which is usually on a yearly basis. As a result, while renewing your lease contract, you will be charged extra Ejari renewal fees.
Before renewing your lease or renting a new home, read your contract thoroughly. When renewing the lease contract, make sure you are aware of any expenses that you are accountable for. Landlords may occasionally pass on maintenance costs paid by developers to tenants.
Recall that these additional costs of renting in Dubai are only a few of the important aspects to consider. Consider additional factors that may help you save money in the long term, such as the closeness of your property to public transportation and vital facilities. People with school-aged children must evaluate their child’s commute to school when determining whether to rent a new house or renew their lease.
QUESTIONS AND ANSWERS ABOUT THE HIDDEN COSTS OF RENTING IN DUBAI
HOW MUCH DOES RENT IN DUBAI COST?
The cost of rent in Dubai might vary greatly based on your preferred home’s location, property type, and characteristics. For example, the annual rent for a 1-bed property in Dubai might range from AED 20k to AED 750k.
HOW MUCH DO RENTAL AGENCY FEES IN DUBAI COST?
While renting in Dubai, the normal rate for agency fees is 2% to 5% of the annual rent. Nevertheless, this varies according on the agency, so be aware of this early on.
Do you want to make Dubai your permanent home? Why not consider purchasing your own city home? See our comparison and estimate of purchasing versus renting a house in Dubai.
SHOULD THE COST OF THE CHILLER BE INCLUDED IN YOUR RENT?
Typically, the landlord is liable for the cost of the chiller, while the renter is responsible for the cost of power use. These houses are promoted as ‘chiller-free,’ implying that the landlord will cover the chiller costs. Yet, landlords may pass on this cost to renters in exchange for a cheaper yearly rent.
That concludes our look at the hidden costs of renting in Dubai. You may always refer to the Dubai Renting Law for further information, which lays out explicit standards and tenant rights.
