Buying a new home can be a fun and exciting adventure, but you will learn a lot along the way. There are many things to consider before purchasing your new Dubai home. As a new homeowner, you’ll likely have many questions when buying a home. Here are things you should consider before deciding to buy versus rent.
What can you afford?
The ideal mortgage will account for 30% of your income or less. As a homeowner, you will need to have money set aside for ongoing maintenance, repairs, and issues. When renting, these are things your landlord would have taken care of. You will also have annual fees to take care of as an owner.
How long are you planning on staying in Dubai?
If you plan to call Dubai home for the foreseeable future, you may want to consider purchasing versus renting. While you need to come up with a more significant upfront cost when buying, you create equity and positively impact your credit.
There are several financial considerations to make. The Dubai Land Department collects your annual maintenance charges. Those are determined based on the RERA Service Charge and Maintenance Index. The index bases its prices on the community and the size of the home.
Coming up with a downpayment can be the most challenging part for new homeowners. According to the UAE Central Bank Regulations, 25% of the purchase price is required for a down payment if the property is less than AED 5 million, and nationals pay 20% down. It is prohibited to use a personal loan to cover the down payment cost, but transaction costs may be considered.
If you decide to turn your home into a rental property, you should ensure the rent price covers the entirety of your mortgage plus maintenance costs.
If you’re purchasing a home that costs over AED 1 million, you may qualify for a residency visa. Some conditions need to be met, but they may provide you a 6-month or a 2-year residency. Homeowners can sponsor visas for immediate family as well. If you own a home valued AED 5 million or more with the mortgage paid off, you may qualify for a 5-year visa. There are additional details and qualifications, but it’s worth looking into.
Choosing a great location that will meet your needs for years to come is essential. If you want a family in the future, you may wish to purchase a home in a great area with access to fantastic schools. You can’t predict the future, and you may change careers, or life may throw you curveballs. Still, a location with exceptional amenities, access to transit, and schools will likely be a great choice.
If you are purchasing a home because it meets your needs right now, and you plan on growing your family or upgrading, you may want to wait to buy a property large enough for your future goals.
Everyone has different styles and tastes, so you should be particular when searching for your dream home. Choosing a layout that works for what you want is crucial. If you are willing to make renovations and change things in the future, this may not be an important detail for you now. However, it would help if you still considered the bedroom and bathroom sizes.
Consider the quality of the home you’re looking for. Do you want a newer construction or an older home? If you view a home during the buying process that is perfect for you but needs some repairs, are you willing to spend the time and money doing them?
If you’re ready to buy your Dubai home, these steps can help you in the process.
Alex Platt is a real estate agent for The Platt Group in South Florida. He brings a wealth of knowledge and expertise about buying and selling real estate.