How to earn income from rental property in Dubai

In recent years, Dubai has consistently attracted particular attention from foreign investors. People from all over the world flock here for the opportunity to live and work in one of the world's most competitive and diverse regions. But not everyone can afford to buy their own housing, so rental services are in great demand here. The local real estate market provides investors with many opportunities to earn money, renting out property in Dubai is among the most popular. Current technologies have reached the point where they allow you to buy a home and rent it out even remotely: specialized agencies take care of the property and search for tenants. At the same time, there is no tax on property rental in Dubai for individuals, which makes this passive type of income even more attractive. In this article, we will look at how to earn property rental income in Dubai and what requirements you need to meet in order to do so.

What should a landlord in Dubai know?

If we are talking about long-term rental housing, then only a legal entity or individual resident of the UAE can become a tenant in Dubai. The contract between the landlord and his clients is controlled by law no. 26 of 2007 and its amendments. By law, the property owner can rent out housing for a period of at least one year. Otherwise, the lease falls under the category of short-term - it will require a special license, or cooperation with the management company with the necessary license. Income from long-term rentals in Dubai is on average 5-10% per annum. This price variation is due to differences in types of housing, location and many other factors.

As for the cost of rent, in general, both parties can agree and conclude an agreement on any terms that do not violate the laws of the UAE. But the legislation establishes restrictions on the increase in the rental amount when renewing the contract. For example, the owner cannot increase the prices for renting real estate in Dubai if less than 2 years have passed since the signing of the first contract. Moreover, when increasing the rental rate, property owners need to focus on the RERA index, which shows the average rates for different types of real estate depending on the location.

Registration of a real estate lease agreement in Dubai

Permission to rent real estate in the UAE involves the mandatory registration of contracts. This is done by the organization RERA, which has developed the Ejari system, which makes it possible to register online for free. This method is very simple and requires only basic information about the lease agreement: information about the property to be leased, the parties to the transaction and the terms of the agreement, after which the document receives a unique barcode for the duration of its validity. Registration of the lease agreement is available to both parties. Without it, the parties to the transaction will not be able to go to court or government bodies to protect their interests. In other words, by ignoring this registration, the tenant is deprived of state protection against unforeseen circumstances that may arise in cooperation with the tenant. Therefore, experts recommend that you register the lease agreement as it should be.

If we are talking about renting real estate in Dubai, then we should also mention the early termination of the contract. According to the rules, the parties cannot terminate the transaction ahead of schedule by unilateral decision, if such an opportunity was not specified in the contract. Moreover, the transaction remains valid even after the death of the tenant or landlord, since in this case all rights and obligations are transferred to the heir. If the heir wants to terminate the transaction, he is obliged to notify the tenant of his plans a month before termination.

Payment of maintenance costs for rental property in the UAE

Real estate rent in the UAE is paid for a year in advance, by bank checks. Payment for rent can be received outside the country, it is enough to be a resident and open an account in a local bank. Some UAE banks can also go to a meeting and open an account for a non-resident who has bought local housing. There are no taxes on rental income in Dubai, so the amount of net profit depends on factors such as the location of the property, its type and category. Also, do not forget about the costs of maintaining and maintaining real estate. Usually the tenant is responsible for the communal apartment, and the landlord pays the service fees for the maintenance of the common areas. From here, an approximate average value of 5-10% per annum is taken. Within reasonable limits, both parties may agree on individual and mutually beneficial exceptions.

If you know all the intricacies of the process, then renting a property in Dubai is relatively easy. It might be a bit complicated for beginners, but with the support of UAE Assets agents, there is nothing to worry about. The specialists of our company have rich experience in working with real estate in the UAE, therefore they have the necessary knowledge and will be happy to advise you on all issues of interest. To contact us, call the contact phone or use the feedback form on the site - we will contact you as soon as possible.