Dubai is the hotspot for real estate business, people from across the world are more interested in buying, selling, renting, or even investing in the property. They are looking for a better opportunity so that they can get advantages in all aspects.
There are many people in the world who have dreamed of buying a property in Dubai but limited economic resources are hurdles to turning their dreams into reality, for such people with limited amounts in their pocket “rent-to-own” real estate property scheme offered by the Dubai’s developers is the advantageous opportunity to avail.
This article is all about essential details in “rent-to-own” and it will be helpful for a better understanding of the real estate scheme.
The Basic Concept Of Rent-To-Own
“Rent-to-own” is a property scheme offered by property developers in Dubai. It is an agreement between buyers and developers, according to this agreement a buyer can gradually buy a property by paying a down payment to the developers in the form of rent or installments for a specific time period, after that period, a buyer has a right to stay on the agreement and buy this property in predetermined price or he can walk away without purchasing.
5% or less is the upfront amount of the “Rent to own” scheme. The rental amount paid in this scheme is more than the market rental price, this is because of the convenience and confirmation of the property to purchase. In both cases whether you buy a property or not the rental amount is non-refundable.
How Does It Work?
If you want to buy a property in Dubai and you do not have enough money for down payments then the “rent to own” property scheme is for you. It turns your dream of buying a luxurious home in Dubai into a reality.
The first thing to consider in buying a property in Dubai is to explore the market, go through deep research, and find out your desired property in the area that suits you more in all aspects like the price of the property, amenities around the property, neighborhoods, and area’s specialty. To find the best in this real estate hub, it is necessary to work with property developers or experienced real estate agents.
After having a great collaboration with the developer, it is important to be knowledgeable about the “rent-to-own” scheme. The value of the property, the lease amount, the time frame, the title deed of ownership, the exit term, the penalty, and the maintenance of the property are the important terms to consider in this specific scheme.
The Legitimacy Of Rent-To-Own Properties
There is a frequently asked question about the “rent to own” scheme, is it a legal process or not? And the answer is Yes. As it is confirmed by the DLD, the Dubai Land Department. The registration of the process is provided in the form of a legal framework and title deed on the portal DLD.
The proper legal agreement or title deed ownership is provided to both parties to avoid any inconvenience in the transaction.
Types Of Rent-To-Own Agreements
Two types of agreements are offered in rent to own property scheme
- Purchase agreement
- Option to purchase
This type of agreement is a simple form of contract between buyers and sellers in which both parties decide all the allegations that are required for the agreement by keeping in mind the future price and trends of the market. No extra charges or fee is required for this agreement.
Option To Purchase
According to this agreement, the buyer has to pay the option fee after signing the contract. The amount of the fee varies as per the total amount of the property. Option to purchase is a contract that gives choice to the buyers to continue as a tenant or purchase the property. A buyer can change his mind according to his needs in the future. The option fee is non-refundable and the seller can legally keep this amount if the deal is not fulfilled.
Advantages Of Rent-To-Own Properties
Rent-to-own has become more popular in the real estate business due to its several advantages as compared to any other scheme or mortgage. Some of the benefits are:
- Due to rent-to-own property, as a buyer, you get the advantage of living in the home you wish to own. Gradually you become an owner of the house by paying the rental amount monthly and after a fixed time ownership of the property can change by paying the total amount of the property by mortgage or through a bank loan.
- It is the best opportunity for those who have limited amounts and are unable to pay down payments. By paying 5% of the total property you can lock the property to purchase it in the future.
- One of the beneficial factors of this scheme is that you can fix the amount of property as per the current trending price in the market and can pay that decided amount in the future without considering the price-rising trend in the market.
Rent-To-Own Vs Home Mortgage
One of the major differences between rent town and home mortgage is the percentage of the amount a buyer has to pay.
In the rent-to-own property scheme, a buyer has to pay 5% to 8% of the total amount of the property as an upfront payment, and for a home mortgage, 20% of the total amount of the property is payable as a down payment.
Another point where rent-to-own and mortgage differ is the process to apply. The rent-to-own application is more simple and easy for buyers as compared to mortgages. The first process is the simple contract between buyer and seller, no third party is included while the mortgage bank plays its role as a third party.
In a mortgage, you can not change your decision, you get a loan from a bank, pay the amount of the property, and become the owner but in rent-to-own, there is a chance to change your mind about the property as per your circumstances.
Visit Website To Learn More About Mortgage Scheme In Dubai
Where To Buy Rent-To-Own Properties In Dubai
Due to the numerous financial benefits of rent-to-own properties, people are more interested in this agreement and looking forward to the advisors for proper guidance about the specific areas suits to purchase rent-to-own properties in Dubai.
The list of these areas is given below:
- Business Bay
- Dubai Land
- Al Furjan
- Al Barsha
- Dubai Silicon Oasis
- International City
- Jumeirah Lake Tower
- Jumeirah Golf Estate
The Rent-to-own real estate properties in Dubai are the most demanding and beneficial properties among potential buyers. It is helpful and has major financial support for those who are living with a limited budget and are unable to pay large amounts at once.