Why are People Choosing Rent to Own Property in Dubai? The Rise of Homeownership

Millions of people from all around the globe consider Dubai a city of excellence, innovation, and endless opportunities. Whether you have landed here for tourism or opportunities for a career or relocation, this city has it all. There is a new trend that has been most talked about currently, which is the rent-to-own houses, which are becoming quite popular in Dubai. No doubt, many tenants in the city have been worried about the rising rent, especially when, at such a price, they can mortgage a home and owe it.

There is a significant number of tenants who have been residing in freehold communities asking the question to landlords about rent-to-own properties. This is indeed a distinctive route for homeownership in Dubai, especially in the rental market segment. Let’s explore Dubai’s rent-to-own properties, and learn the benefits of it.

When think of this, it gives you a very convenient payment plan where buyers can pay the down payments, and later make monthly payments. With this special kind of agreement, buyers will only be required to pay a Down Payment of just 5%. Homeownership here becomes more affordable, without you having to make any deposits or even bank mortgages.

This kind of agreement is where you get the option to rent a property with the ability to purchase it later. It also gives you the need to contribute a portion of your monthly rental income towards paying the downpayment and owing a house. You as a tenant can effectively build your equity while residing in the property as well.

RTO allows you to pay rent to your landlord for a period where a portion of your monthly payments will be kept aside as equity for buying that house. Once the rental period is over, you have the option to pay the remaining price gradually and owe the property all for yourself.

The Advantages:

• The primary reason to consider TO is the opportunity to buy your dream home overtime, without having to burn your pocket additionally. It is a healthy and smart pathway towards homeownership.

• RTO arrangement also offers you financial flexibility, unlike traditional mortgage options. You need not have to pay a large down payment, you can manage initial costs, and down payments as per your convenience.

• With this, you have the control in hand to try the property before buying it. When you live in the property you can assess how comfortable the place is, the location, amenities, neighbourhood, and so on. This way, you can make informed decisions for you.

• If you have a less-than-accurate credit score, getting a mortgage seems to be impossible because creditworthiness is the most crucial element. When you make timely rental payments, you win over the trust of the landlord, further allowing them to trust you with the RTO concept. And, through this, it also strengthens your credit profile, giving you a mortgage a convenience in the future.

So, what are you choosing?

This trend has become pretty common in Dubai from the past few years, as we see the rental rates shooting up high. Rent-to-own agreements are ideal for budget-conscious buyers who need more time to save for a down payment. However, it's important to remember that extended payment plans may delay your return on investment (ROI). For those focused on investment, direct payments are often the smarter choice. Explore properties for sale and discover prime investment opportunities in Dubai today.