How to own an apartment by paying monthly rents?
Rent to Own
A few developers in Dubai, are offering rent-to-own schemes. As demand and popularity for such projects have grown in recent years.
In a rent-to-own scheme, the equal monthly rental payment is using as payment of the property. Rent-to-own schemes are usually offered by developers in mature markets, to attract end-users. In the UAE, most of the properties selling under rent-to-own schemes are apartments. For villas, most of the demand coming from traditional markets – Asian and Arab nations.
Dubai was the first to introduce this scheme through the launch of the Ijarah service in 2018. While developers in Dubai and Abu Dhabi have taken the lead when it comes to rent to own schemes. Ras Al Khaimah is also offering these attractive solutions to buyers. Developers are offering seven to 10 years post-handover payment plans. Which are like rent-to-own schemes but they are not promoted under this banner.
Growing demand
The Danube chairman said demand for rent to own schemes is on the rise. Especially among families with a limited income. The rise in demand will be visible in the early next year when business and employment will rise. Once the Covid-19 pandemic subsides, more people will move to the UAE. It pushes up the property prices and rents, forcing residents to invest in their own homes.
Fadi also echoed Sajan’s views on the rise in demand and popularity for rent-to-own schemes. Properties under the rent to own schemes are easier to get than the secondary market. As the latter will need binding contracts that should register with DLD are bound by a deadline. This combined with the financial ease to get properties and receive complete ownership. These are pivotal factors contributing to the increasing demand.
Rent-to-own preferred
Most of the nationalities living in the UAE are exploring rent to own options. Indian and Arab nationals seem to have taken the lead. The residents from the Middle East, South Asia, and the Philippines are dominating. Especially those whose household family income is between Dh12,000 and Dh20,000.
The largest professional groups, owners of small and medium enterprises. The families from Egypt, Jordan, India, Pakistan, Bangladesh, Sri Lanka, and the Philippines. The average ticket rate of rent-to-own varies The average ticket rate of the properties can vary, depending on their size and location. But so far, such schemes are being offered for low-to-mid-range properties.
For a studio unit with a price of Dh400,000. The monthly installment could range between Dh3,333 and Dh4,000. For the one-bedroom apartment, the monthly payment is between Dh4,500 and Dh5,000. The monthly installment for a two-bedroom hall apartment is between Dh5,500 and Dh6,500. These are a bit higher than the monthly rental packages in each category,” he concluded.
Source: Khaleej Times
