Landlords are offering 12 cheques, rent-free months, free air conditioning and flexible payment plans
Tenants in Dubai are finally in the driver’s seat and have the power to negotiate with their landlords on pricing and number of cheques. New supply in the market is causing rents to drop. Faced with the prospect of leaving homes empty, landlords with mortgage commitments are even offering 12 cheques, rent-free months, zero commissions, free air conditioning and flexible payment plans to attract tenants.
Tenants looking to move homes must keep in mind that property prices listed on advertisements and websites should only be used as a guideline as the actual negotiated price is usually different.
“For example, you may see a two-bedroom in Downtown Burj Khalifa advertised for Dh100,000, however the reality is that we have recently seen many two-bedrooms there close at an average of Dh90,000 and with four cheques,” says Lynnette Abad, partner and head of Property Monitor at Cavendish Maxwell.
However, not all rents have fallen. Ultimately, it all boils down to negotiation. “It depends on how aggressive one is, how persistent you are with the agent and/or owner and the willingness to walk away. Take emotion out of the equation and do your homework first, so you have ammunition for your negotiations. Be firm and always have a few options you are working on at the same time. The landlords will buckle as the power has clearly shifted to the tenant,” adds Abad.
Tenants on historic leases will do well to look around the market for cheaper options than complain of rental increases. However, you have to compare the cost of moving versus paying a higher rent.
“Considering the five per cent agency fee, relocation costs and the hassle, it’s best to try to negotiate with your landlord and get a reduction,” suggests Kalpesh Sampat, COO of SPF Realty.
Lewis Allsopp, CEO of Allsopp and Allsopp, adds: “As with anything, no one is saying every single rent has dropped. There will be other factors, such as exact location [not just community, but next to pool and park for example or with a view], some places will have upgrades, larger plots, be in better condition. It’s a trend in the market and what is happening is the bigger picture. But as with anything, not everyone is going to feel it immediately.”
Communities such as Discovery Gardens, International City, Dubailand and Jumeirah Village Circle (JVC) are seeing good rental deals, according to Cavendish Maxwell’s Property Monitor. The 12-cheque option is slowly gaining ground in these areas.
There are also competitive deals to be had in Business Bay, Sports City and International Media Production Zone, as per SPF Realty.
“We are seeing good deals in majority of areas, including popular rental areas such as Emirates Living and Arabian Ranches,” informs Abad.
“Outlying communities offer bargains in terms of what you get for your money, but the established ones are seeing great deals relative to what you would have got for the same property in the same community in previous years,” reckons Allsopp.
The best way for tenants to find such deals is through real estate agencies and online searches.
“In this market, because commission is paid by the tenant, the majority of landlords do not bother advertising their properties themselves. A tenant needs to be savvy and resourceful by doing their homework, speaking to reputable agents who have access to proper rental data and are knowledgeable of recent transactions in the area you considering,” says Abad.
Tenants must compile a list of areas that fit their budget. They should also be open to areas they haven’t considered before and look at various area guides to know about the amenities. Ask colleagues, friends or strangers at a building/community you are visiting about their rental experiences. Join a Facebook group for the area/building you are interested in. Not only will you get real information about the area/building, but you will also see properties for rent.
Another option tenants can consider is rent-to-own schemes. “Tenants should convince landlords to consider giving them an option to buy the home in two to three years. Landlords whose properties are not renting out for over two to three months should consider giving an option of rent-to-own to the tenants. In brief, it is converting expense to asset by applying major part of rent towards the purchase/sale price. For owners, it helps secure a higher rent, higher sales price [usually 10 per cent for both] and less void periods,” concludes SPF’s Sampat.
All rights reserved to the initial publisher for Khaleej Times.
Collected and published by Arms &McGregor International Realty® editorial team. Get in touched with us at firstname.lastname@example.org