Thursday, August 28, 2014


Rent-to-own or rent-to-possess schemes were previously introduced in Dubai and Abu Dhabi during early 2000s, when UAE was establishing its own marketplace. Improving the buyer confidence was the primary objective behind implementing these schemes. According to the statement of international property agency Chesterton, it is possible to benefit further Dubai property market, if developers reintroduce the rent-to-own schemes again. Such schemes help genuine property buyers by making it affordable to those who don’t actually afford the booming prices of real estate assets.

What is rent-to-own a property in UAE?




Rent-to-own a real estate property in UAE is just like an option in contract. Tenants who are interested buying a property at fixed price with in specific period of time can avail this option. A portion of monthly rent paid during their tenancy is considered as down payment on the property. Properties leased under the scheme, are leased on higher prices than market rate to cover the option price or the deposit that tenants have to pay to activate the option. If tenant fails to pay the decided amount as rent, then owner is free to rent or sell the property to other buyers.

How rent-to-own could benefit tenants, sellers and developers in Dubai during current market scenario?

Despite improving buyer confidence by reducing the risk element in buying property in UAE, rent to own schemes can also benefit the sellers and developers and tenants during current market scenario. Being the second home for expats across the world, several expats have been living in UAE for many years, who have become interested in buying property could find it still expensive to be purchased.  They cannot buy accommodation or office space because of rising property prices and mortgage cap restrictions. The scheme is capable to benefit such genuine Dubai property buyers who actually want to purchase home or office space. They get the chance to experience the community by living there before choosing it as permanent residence. Moreover, those who can’t afford paying the huge deposit can avail this convenient option for paying option money in installments in the form of monthly rent while living in the same house. On the other hand, sellers obtain an option fee and real buyer for their property.  Besides this, seller can sell their property at higher prices because serious buyers don’t want to miss an ideal asset especially when they can’t afford buying property in any other way. Whereas for developers, bidding such rent-to-possess schemes are very beneficial as they will drag significant buyers who are actually interested in buying property in their project.

Success in the past



Positive outcomes for such schemes had been observed during early 2000s when few residential and commercial projects in Dubai and Abu Dhabi offered rent-to-own schemes. Al Zeina in Al Raha Beach development and high-rise projects in Al Reem Island are the project in Abu Dhabi that allowed tenants to buy same property using this option. The option was convenient that allowed tenants to live in the property for few years before agreeing to officially purchase the unit. If they find the property unit suitable for buying the rent they spent would be considered as deposit or if they don’t want to buy they can simply move out without paying any extra money. Similar property deals are offered in few Dubai neighbourhoods including The Greens, Motor City, Sky Court (Dubailand), Downtown and Dubai Marina.

Making property buying affordable in Dubai, rent-to-own schemes are expected to increase transparency in property market by facilitating genuine buyers. Flexible payment structure enables foreign buyers to purchase a home or office in UAE.  Furthermore, market analysts observed that such kind of schemes worked successfully on commercial levels, when a project developer is offering such option for buying property unit in his project as compared to individual home owners or landlords letting and selling their assets.

Conclusion: Real estate policies that actually benefit end users or in other words property buyers, definitely affect the property market positively. 





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