Beyond the Rent: A Guide to Hidden Costs When Renting in Dubai

Dubai, the city of towering skyscrapers and luxurious living, beckons expats and dreamers alike. But behind the glitz and glamor lies a practical side to consider, especially when it comes to renting a place.

The advertised monthly rent that you will see on the listings may seem very attractive, but there are some additional costs that you need to consider when renting a place in this city.

September 17, 2024

The advertised monthly rent that you will see on the listings may seem very attractive, but there are some additional costs that you need to consider when renting a place in this city.

Essential Fees: Gearing Up for Your Rental

● Security Deposit: This refundable deposit acts as a safety net for the landlord in case of damages. Typically, it ranges from 5% of the annual rent for unfurnished properties to 10% for furnished ones. You’ll get it back upon vacating the property, minus any deductions for repairs.
● Ejari Registration: Dubai’s Ejari system is a government-run platform that authenticates rental contracts. Registering your tenancy agreement is mandatory, and the fees vary depending on the chosen method. Online registration incurs a fee of AED 100 (excluding VAT) with additional knowledge and innovation fees of AED 10 each. Alternatively, registering through real estate trustees’ centers involves a slightly higher fee structure.
● DEWA Deposit & Connection: Dubai Electricity and Water Authority (DEWA) is the sole service provider for utilities in Dubai. Connecting your apartment or villa requires a refundable security deposit: AED 2,000 for apartments and AED 4,000 for villas. In addition to the security deposit, there are also non-refundable activation charges associated with the initial connection process. These charges can vary based on the meter size and include a registration fee, knowledge fee, and innovation fee.

Not-So-Obvious Expenses: Keeping Your Budget on Track

● Housing Fee: An often overlooked cost is the Dubai Municipality fee, also known as the housing fee. This 5% levy on your annual rent is split and added to your monthly DEWA bills.
● Agency Fees: Unless you’re a seasoned Dubai resident with a knack for finding properties yourself, you’ll likely enlist the services of a real estate agent. Their fees typically range from 2% to 5% of the first year’s rent, a one-time cost unless you involve them in future renewals.
● District Cooling: Dubai’s scorching temperatures necessitate air conditioning. While some buildings provide central air conditioning with utility bills, others rely on district cooling systems managed by separate companies. If your chosen property falls under the latter category, expect a separate security deposit and charges based on usage and property size. Look for “chiller-free” rentals where the landlord covers the base cooling cost, with you paying for your individual usage.
● Moving Costs: Unless you’re packing light and moving across the hall, relocation expenses need to be factored in. Moving companies in Dubai offer a range of services, and the cost depends on the size of your property, the distance you’re moving, and any additional services like packing or storage.

Beyond the Initial Move-In: Planning for Long-Term Costs

● Rent Increase: Be prepared for potential rent hikes upon lease renewal. The increased rent will also reflect on the housing fee, as it’s calculated as a percentage of your annual rent.
● Renewal Fees: Ejari registration needs to be renewed with each lease extension, incurring the aforementioned registration fees again. If you involve an agent in the renewal process, expect to pay their fees as well.

Proactive Tips for Savvy Renters

● Scrutinize the Tenancy Agreement: Before signing on the dotted line, meticulously review the tenancy agreement. Ensure a clear breakdown of your responsibilities regarding maintenance fees and utility charges. This will help avoid any unexpected costs in the future.
● Factor in Future Expenses: When calculating your overall rental budget, consider not just the monthly rent but also the potential hidden costs like Ejari renewals and possible rent increases. This will give you a realistic picture of your long-term financial commitment.

Renting in Dubai can be a smooth and rewarding experience when you’re prepared for the hidden costs. By understanding these additional expenses, you can create a realistic budget and avoid any financial surprises.

Nexus Properties can help you find your dream place to rent and guide you every step of the way as you incur these additional costs. Contact us today so we can embark on your Dubai adventure together!