The UAE is home to over 200 nationalities. Emiratis constitute roughly 20% of the total population, making UAE home to one of the world’s highest percentage of immigrants.
As with many other Cities, the Dubai rental market is a very key component to the success of the real estate industry. Potentially even more so here where real estate contributed to 13.6 percent of Emirate’s GDP in 2019. At the Dubai Land Department, 2018 saw 53,000 transactions worth Dh223 billion with investments reaching Dh80 billion.
We are an important stage in the property market cycle where we find ourselves with a large supply of property, now is the time to prioritise the tenant’s experience to ensure you are gaining the expected returns upon purchasing.
So how do we ensure our Landlords get the highest returns for their investment? and tenants stay for long lengths
The most important element is knowing your market, who is your ‘typical’ tenant and what level of rental income can you expect and price the property correctly from the start.
As previously written now that we have the access to the DEWA move in and move out requests on propertymonitor we are in a position to give you this data to show where to invest or what to expect if you have an existing property (ie, lease durations/popularity of areas).
Key issues we face with both Landlords and Tenants for you to be aware of and solutions offered if you lease through Carlton Real Estate.
Number 1 is payments – a contribution to vacancy rates is the large down payment tenants have to make to lease. For an average 1 bedroom in Dubai Marina the initial payment required for basic requirements, 1 rental payment based on 4 chqs, the connection of DEWA, deposit and commissions is around the AED27,000 market. This equates to over $7,500 because of these costs the tenants are sharing paying more rent than if they leased a 1-bedroom apartment.
Our Solution: We have an agreement where we can get the Tenant a one year loan to enable them to pay back month repayments. This benefits the landlord and the tenant; tenant gets monthly rent payments and the landlord gets 1 chq payment for the year.
It goes without say, hands-off property investments are always the best for all parties involved for many reasons. I have found it much easier to lease apartments to tenants with maintenance contracts or management in place. The tenant benefits from a contact in Dubai who is available full time and the landlord gets to receive the rent without any calls or admin.
Our Solution: we have a great maintenance company under our Holding company and property supervision available at a low cost of 5% of the yearly income.
Advice: In today’s market a Landlord should always try and retain a tenant at the time of renewing a current tenants lease. If the tenant has paid rent on time and looked after the property then it is best to negotiate if the rents have lowered. Once they vacate the property could be vacant for up to 2 months with a loss of 1,000’s more than if the lower rent was accepted.
Our Solution: We negotiate rental renewals free of costs to all of our clients, as a third party and specialist in the rental market we, in my experience, get more profitable and positive results than if and arrange the collection of cheques, contracts signings, and Ejari.
Don’t keep a property empty for the sake of price, the damage to your property will surpass the lower rent, the weather we experience in the summer accelerates damage and effects leasing the property in the future.
Our Solution: at our cost, we will turn on the DEWA for viewings and clean the apartments to ensure they are at their best for each viewing. Our maintenance team will expect the properties regularly to ensure that apartments and gardens damages due to the weather is kept at its lowest.
I am afraid we cannot foresee which tenant is potentially going to be bounce rental cheques for any reason but it does happen, sometimes with the tenants you least expect.
Solution: we are working with a credit agency to get access to basic information on tenants’ finances, of course with the tenant’s approval. Just like in the UK and USA a report will be generated and will show if the tenant has bounced chqs in the past, has any court cases or general bad credit history.
If you are interested in finding out more about our services or get an up to date sale or leasing valuation on your property please do not hesitate to me.
data from Dubai statistics compiled by Laura Adams