16/12/2019

To buy or to rent?

With property prices favouring a buyer’s market, the answer to the age-old debate ‘to rent or to buy’ is now crystal clear. Now that it is answered, it is time to think of other important factors. Yes, that include location hotspots, future return on investment, and short and long-term financial implications. That’s not all, there are other pros and cons to both buying and renting. Here are few to keep in mind.

Among major advantages of renting are less short-term financial outgoings, less commitment and flexibility. Renting spares you from paying upfront fees, which will include DLD fees, registration and maintenance fees. In addition, if you want to live in the area for only a short period of time, renting allows you the flexibility to move places more often.

Although, you will not have much freedom in terms of customizing your house as you will not be allowed to carry out any renovations within the property. As years’ of renting will add up significant outgoing costs with no tangible asset to show for at the end, more long-term expenses is another con.

If you are buying to live in the property, or to lease it, or even to sell it, you are paying your mortgage towards a longer-term asset. Needless to say, the sense of stability and security you get when you buy a property is tremendous. Besides, they are also the most attractive sources of income.

However, buying is not without cons, though negligible. For instance, a surprising variety of expenses, like maintenance fees, insurance fees, mortgage payments can be a bit overwhelming. Although the UAE’s expats have traditionally sought to rent rather than buying properties, they can be more confident to buy at close to the bottom of the current cycle to benefit from potential long-term capital growth, thanks to the market attaining maturity.