Rent to Own Properties in Dubai Guide - Schemes and Process 2021

Thu, 14 Jan, 2021

If you haven’t earned enough money to buy a house, then rent to own in Dubai is a viable and cost-effective option. Living in a rented home does not give you the financial freedom that comes from owning your own property, where you do not have to bear the burden of monthly rental payments going into your landlord's pockets. The worst part is that you continue to pay for a property that does not turn into your own asset even after years of paying.



In addition, the tenants will need to consider their rental payment every time they make a financial decision, including switching a job, starting a business, getting their children through college, getting married, or anything that involves a considerable sum of money.

Luckily for all, the UAE has one of the best environments to buy properties, with Dubai leading the charge with the most flexible regulations and some of the best financing solutions for owning your own home. You will find banks offering the most attractive mortgage solutions while property developers bring you ideal rent to own Dubai property choices. 

What is Rent to Own in Dubai?

Rent to own offers are fast becoming very popular in Dubai; however, not many people understand what they entail. In simple terms, rent to own properties involve the buyer purchasing the property from a developer by paying on a monthly, quarterly, or annual basis, as written in the agreement.

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The payment will comprise the rent and a fraction of the property price. Once the tenure ends, you will become the sole owner of the property and will be able to enjoy all its perks. By paying a bit more than the market rental value, you will be buying your equity and will one day be free from the burdens of rent.

What Companies Offer Lease to Own Dubai Solutions

In Dubai, there are a lot of credible property developers that churn out high-end residential properties. Along with the best residential setting, these Dubai Real Estate Companies also offer mortgage loans and rent to own deals.

So for those looking to purchase the property most suited to their needs, these financing options are the best opportunities. One can easily start living in their own homes without having to pay hefty prices in one go. 

Rent to Own Properties vs Mortgage Financing

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Mortgage loans have their own set of benefits, as they also allow you to buy properties in a convenient manner. Let’s discuss some basic factors differentiating rent to buy offers with mortgage financing

Down Payment or Upfront Cost

The major difference in terms of payments is that with mortgage loans, you need to pay at least 15% of the total property price in advance if you are a UAE national, while as an expat you will have to bear a minimum of 20% of the price at the beginning of the process.

With a rent to own scheme in Dubai, you get to cut down on the up-front costs substantially and have to pay around 5-8% of the property price, which includes all registration charges, real estate agent fees, and other additional costs. The best thing is, that you can take a bank loan to pay this initial charge and keep yourself burden-free to the maximum extent.

Application Process

The second important aspect where rent to own arrangement differs from a mortgage loan is that the application process is much more simple and easy for the buyer. As with mortgage loans, there is the direct involvement of three parties, i.e. the seller, bank, and buyer, and as lease to own deal is between the property developer and buyer only, there are lesser complications and the application process is very quick. 

Flexibility of Commitment

In a mortgage loan, you need to select a property, finalize all the processes and get ownership of your Apartments for sale in UAE By CryptoHouses For Sale In Costa Brava DAMAC Lagoons Properties For Sale In Malta Damac LagoonsVillas For Sale In Malta Damac Lagoons townhouse, or villa. . It doesn’t give you room to change your mind at any point in time until you are able to sell the property off.

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With rent to own schemes in Dubai, you can opt for an option-to-purchase scheme, which will allow you to easily decide against buying the property if you change your decision. So with rent to own Dubai scheme, you can keep your options open.

Two Types of Rent to Own Apartments Agreement

You can pursue a rent to own setting in multiple ways. The contract type determines the overall flexibility, security, and financial benefit there is for the buyer and the seller. Let's take a look at both agreement types common in rent to own Dubai schemes. 

Option to Purchase

This type comes with a choice for the buyer to opt out of the deal and continue as a tenant. The buyer has to pay a sum under the 'option fee', which is basically the cost of having a choice for the buyer and some compensation for the seller when the deal is not fulfilled. When the buyer decides to not proceed with the purchase, the option fee is legally kept by the seller.

Purchase Agreement

This is the simpler form of the process, where the buyer and seller agree upon a price, rent, and total monthly payments after considering the future value of the property as per the market trends.

Benefits of Rent to Own Homes

Rent to own deals bring you the most beneficial and convenient way of entering the property market as a buyer. You can simply pay for your favourite properties through an agreed-upon tenancy agreement and payment plan, and make yourself the future owner of a coveted piece of real estate. Let’s take a look at some of the benefits you secure when you buy the property with this method. 

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Financial Ease

If you haven’t accumulated enough savings to buy your favourite property, you need not worry anymore as lease to own Dubai schemes are here to help your cause. You can easily continue paying the same way as you do with your current property for rent. 

Capital Gain with Time

It is an established fact that the Dubai property market will continue to soar, which is a continuous trend in the past few decades. So if you start saving now to purchase a property in the future, you will find the increasing prices a major hurdle and you will also have to pay a much greater sum than you have to now.

With rent to own schemes in Dubai, you can easily benefit from the current prices which are surely less than they will be in the years to come. This way, you get a better price and also an opportunity to get a good capital gain once you completely own the property in the future.

Maintenance Cost of Rent to Own Apartments in Dubai

Another major advantage of opting for a lease to own Dubai deal is that the owner has to take care of all maintenance costs associated with the property. You read it correctly — you won’t have to pay for maintenance of the apartment or villa you have acquired until you become its sole owner.

Buy or Rent Property in Dubai?

Dubai is a city of many attractions, as it offers a pleasant living environment and plenty of earning opportunities. Its real estate sector is considered to be one of the most quickly progressing industries in the Middle East and provides investors with the opportunity to take part in lucrative property deals that cannot be found anywhere else in the world.

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So if you are living in a rented property while enjoying all the other benefits of living in Dubai, now is the best time to take it a notch higher. It is very easy for someone with a bankable source of earnings to become an investor in the city. You can break free from monthly payments of rent in Dubai property and become the owner of a property yourself. 

Though every individual has their own set of situations and plans for the future, buying a property is always advisable for anyone who can do so. The rent to own offers in Dubai has brought the opportunity for everyone who can afford to live on rent, so now is the time to take advantage of these deals. Here are some of the benefits you can gain by simply becoming a property owner: 

  • Firstly, you become free from the periodic burden of rental payment, which allows you greater financial freedom and opportunity for further monetary gains. 
  • You get the benefits of equity, which means you can avail all financial services offered in Dubai for those with equity. Be it property loans, personal finance, or business debts, you can open new avenues of financial progress for yourself.
  • Last but not the least, the capital gain is a major attraction. There will be a great difference in the price of the property on the day you enter the rent to own agreement and when you finally become its owner. Then you can choose to benefit by selling the property off, giving it out on rent, or simply continue using it as your residence.

To find out rent to own offers in Dubai, visit DAMAC Properties.

How Does The Payment Plan For Rent To Own Schemes in Dubai Look?

Depending on the terms of your rent to own contract, the payment plan is unique for every buyer and its terms are decided together by the buyer and seller.

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The Dubai Land Department has provided some guidelines and associated fees regarding the financing, registrations, transfer, and termination of these contracts; however, all rent to own projects in Dubai have unique elements with customized payment plans, depending on their case.

What Should Be Included In A Rent-To-Own Contract?

There are several features and elements that should be included in your lease to own contract in Dubai.

Value of the Property: The price of the asset that has been agreed upon between the buyer and the property developer.

Timeframe: The term of the lease as agreed by the two parties.

Title Deed Ownership: The buyer should have ownership of the title deed throughout the duration of the contract.

Exit Terms: This refers to the terms that allow the buyer to terminate the contract legally without penalty.

Penalty Clause: What penalty the buyer has to pay for defaulted payments.

Refundable Percentage of Down Payment: Your contract should specify the percentage of the down payment, if any, that is refunded at the time of the exit.

Sudden Job Loss Clause: This refers to the clause involving sudden job loss which results in missed deadlines for payments or mortgage rejection.

Property Maintenance Terms: This will determine who will be responsible for the maintenance and upkeep of the rent to own property in Dubai during the duration of the contract.

Best Areas in Dubai for Rent to Own Properties

1. Business Bay

Located right in the center of Dubai, Business Bay is one of the most popular residential area in the city. Here, you can experience the ultimate urban lifestyle Dubai provides. With high-end housing projects developed around the water canal, Business Bay is a posh neighbourhood featuring numerous properties with scenic views of the water, the iconic Burj Khalifa and Dubai skyline. The area is well equipped with local transport facilities, restaurants, supermarkets and everything you need in a profound luxury setup.

Property Prices in Business Bay

The average price for Properties for sale in Business Bay Dubai range from AED 1M for a studio to more than 6M depending on amenities and size of the property.

2. Dubailand

Dubailand is considerably one of the most diverse residential hubs in Dubai. Leading property developers in the region are developing exclusive communities to meet the needs of distinguished home buyers. With the majority of area under construction, Dubailand is a comparatively affordable neighbourhood. Dubailand will soon be looked upon as a city within the city given to its strategic development comprising of everything including lifestyle residences, shopping and recreation facilities, theme parks, schools, hospitals, and more.

Property Prices in Dubailand

Average property prices in Dubailand range from AED 500K to AED 3M and more depending upon the house.

3. Al Furjan

Al Furjan is a secluded residential community away from the city hassle offering a quiet and comfortable lifestyle to people in a sub-urban setup. Al Furjan literally means a ‘collection of houses’ and complementing its name, it has different residential establishments like Apartment for sale in Dubai, townhouses and villas for sale in Dubai. Al Furjan’s proximity to major highways like Sheikh Zayed Road and Sheikh Mohammed Bin Zayed Road make it a desirable location for home buyers.

Property Prices in Al Furjan

The average apartment prices in Al Furjan range from AED 450K to AED 4M and  villas range from AED 2M to AED 5M and more.

4. Al Barsha

Al Barsha is one of the most popular residential area in Dubai. Home to the famous “Mall of The Emirates”, Al Barsha is prominent self-contained community with affordable properties in Dubai. It is a self-contained community with a range of restaurants, shopping centres, schools, etc. Located in the middle of all the happening places around the city, Al Barsha’s location is very convenient for the residents.  The area offers a mix of villas and apartments.

Property Prices in Al Barsha

The average price range of properties in Al Barsha ranges from AED 500K for a studio apartment to AED 10M and more for bigger houses.

5. Dubai Silicon Oasis

Silicon Oasis is a suburban area which is also technology hub in the commercial setup. People looking for a holistic community lifestyle can look out for rent to own properties in Silicon Oasis. The area has several apartments and sub communities for both families and individuals.

Property Prices in Silicon Oasis

The average price for properties in Silicon Oasis ranges from AED 300K for a studio to AED 5M for luxury villa.  

6. International City

One of the best areas for people looking for affordable housing in Dubai is International City. It is a country themed locality of clusters named after different countries of the world. International City is known for its architecture. With numerous country based residential and retail complexes. This community is made out of several districts like England District, France District, Morocco District, China District and more.

Property Prices in International City

Prices in Internet City range from AED 200K to AED 1M depending on the house.

7. Jumeirah Lake Towers (JLT)

JLT is an independent multi structural mixed use community consisting of 26 clusters, named around the English alphabet. The JLT neighbourhood is well equipped with facilities like supermarkets, malls, schools, hospitals, restaurants and other entertainment avenues. This picturesque community with four lakes and Greenland is well connected to the city with two metro stations in the vicinity. Its strategic location makes it one of the most desirable residential and commercial location.

Property Prices in JLT

JLT is a wide spread area with wide range of options. You can find houses in JLT ranging from AED 400K for a studio to over AED 15M for a premium lifestyle penthouse.

What Are the Fees for Rent to Own Schemes in Dubai?

According to the Dubai Land Department, the following fees are charged by rent to own developers in Dubai:

Seller Fees

  • 2% of the sale price of the property.

Buyer Fees

  • 2% of the sale price of the rent to own property in Dubai.
  • 25% of the rental value
  • AED 250 as the fee for title deed issuance
  • Map issuance fees, depending on the type of asset
  • AED 4,000 as registration fee for properties that are valued at or above AED 500,000
  • AED 2,000 as a registration fee for properties that are valued below AED 500,000.
  • AED 10 Knowledge fee added to each fee
  • AED 10 Innovation fee added to each fee

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Effects of COVID-19 On Real Estate Market

Although the global pandemic has affected real estate markets in the world, Dubai’s real estate started in the year 2021 on a strong note as many high-value and popular areas of the city witnessed good buying and selling activities in January and February.

Real estate developers, including DAMAC, believe that going forward, the short-term impact of COVID-19 will not put too much strain on Dubai’s property sector which is a long-term business. Hence, many real estate and financial analysts already believe that Dubai has weathered its toughest time.

Earlier this year, the Dubai Land Department also proclaimed that Dubai Marina, Palm Jumeirah, Burj Khalifa, and Business Bay saw the most interest from investors and were the most sought-after properties in the first quarter of 2021. Hence, investors considered rent to own in Palm Jumeirah and Dubai Marina as two of the most lucrative opportunities in UAE’s real estate.

Real estate market growth was seen to be about 17% in January as compared to the corresponding month in 2020 with real estate brokers earning AED84 million as their fee alone.

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Rent to own offers in Dubai is the perfect route for expats and residents to own a property in UAE. They involve affordable rental plans that are converted into equity, have flexible payment options, and come with big advance payments. Hence, this is a much better option than living in a rented home. Rent to own properties in Dubai is very beneficial and you have the chance to own them without even paying the down payment.

Frequently Asked Questions

How to buy an off-plan property in Dubai?

There are several off-plan projects that offer rent to own flats, rent to own apartments, and rent to own villas in Dubai. Just head to and find the properties that best fit your needs based on amenities and facilities, lifestyle, preferences, and other factors. Contact DAMAC’s project developer to book your property.

Is it better to rent or buy property in Dubai?

Buying a property is always a much better choice than renting. The amount of money that you pay on rent does not accumulate into equity for a future asset. Buying your property, either through mortgage or rent to own in Dubai will allow you to use your money that will go towards buying an asset for yourself, which will give you several monetary benefits in the future.

Hence, considering your unique financial situation, you should always aim to buy  Properties for sale in Dubai. The property market in Dubai is very lucrative for investors and yield excellent returns in terms of rental payments, equity benefits, price hikes, and legal benefits.

Is rent to own programs legit?

Rent to own projects in Dubai are completely legitimate; however, it is always important to do some research when choosing your properties. Projects owned by renowned property developed like DAMAC are very safe and lucrative options that will give you a lot of good value for your money. Selecting a property through a recognized and certified property developer will ensure you can get a property with better facilities in a better community, and one which offers higher capital and rental gains.

What credit score do you need for rent to own?

The credit score provides the lender with insight into whether a home buyer is able to pay off their loan. However, since there is no loan involved in rent to own contracts in Dubai, investors do not need to show their credit loans. Some developers may request you to show your credit score for their own safety or convenience, but most property developers will be happy to give you a great deal without knowing your credit score.

Can you pay off rent to own early?

Paying off the amount depends on the mutual agreement between the buyer and the seller. The contracts often carry clauses that allow or prevent early payoffs, so as a buyer you should check this at the time of the initiation of the agreement.

If the contract does not state anything about it, you can discuss this concern with your property developer. In most cases, the buyer will need to pay extra rent; however, this will be less than the overall rental amount stated in the contract, while the property price will remain unaffected.

How does rent to own mortgage work?

The process of rent to own scheme in Dubai is very simple to understand. The buyer and developer enter an agreement, in which the buyer pays off the price of the property and the rent for that period according to an agreed-upon payment plan.

The buyer gets the benefit of pursuing property ownership without having to pay the full price or a hefty down payment, while the sellers get to make some profit out of the investment while also receiving beneficial cash inflow. There are two types of rent to own agreements, so buyers should learn about them and select the one that suits them more.

What are the steps to rent to own a house?

Rent to own schemes in Dubai has a very simple process. You have to follow these steps: 

  • Find properties by developers offering rent to own projects in Dubai.  
  • Select a property and enter the agreement with the seller. 
  • Register the agreement with the government authority and pay the charges.
  • Follow the payment plan and eventually become the owner of the property.

These are all the steps you have to follow to buy a property through rent to own offers in Dubai. The agreement details, rental charges, and several other aspects depend upon the agreement between the buyer and seller, but the steps to follow generally remain the same as there aren’t any more government or legal requirements.

Can I rent to own a home with bad credit?

In a rent to own agreements, the credit scores are generally not considered. Some developers might prefer considering the credit history, but usually, it isn’t a factor that will stop you from getting a rent to own agreement.

However, it is suggested that you enter the agreement only if you are sure you can follow the payment plan. If you think a certain property may become out of reach for you after some time, you should choose a property that is has a lower price and enter that agreement.

How much is the average rent in Dubai?                                    

Compared to living in some of the major expatriate cities in the world, Dubai costs way less in terms of cost of living. The average rent for a studio apartment in City Centre in Dubai is about AED 5,527 or USD 1,505.07 and that of a 3-bedroom apartment is AED 10,799.55. The rent of a one-bedroom apartment outside of the City Centre is AED 3,687.32 while that of a 3-bedroom apartment is AED 7,490.97.

This is quite low compared to London where the average rent of a studio apartment is around AED 8747.65; New York, where the average rent of the same is AED 11,348.94; and Singapore, where the average rent is AED 7,991.05.

The rent to own in Dubai Marina is one of the most popular ways to get property in Dubai. Other highly sought-after districts include Jumeirah Lake Towers, Jumeirah Beach Residence, and Dubai's Old Town, all of which have similar price ranges. Expats and citizens choose to live in these areas because of the wealth of amenities they provide as well as the beautiful and exclusive community in which they can become a part.

Will rent go down in 2021 in Dubai?

Overall, rents on apartments in Dubai are expected to continue to decline during the rest of 2021. However, the premium and up-and-coming communities in the city are seeing a spike in rents because residents are now flocking to high-end apartments after a year of decline in rent.

Hence, rent on villas on average has increased by about 4.7%, whereas the rent on apartments has fallen by about 10% since April 2020. It is also estimated that about 17% of Dubai's property units are vacant, making rent to own flats in Dubai a highly favourable investment option among expats.

Another good news for people looking for rent to own properties in Dubai in 2021 is that landlords continue to offer discounts, flexible payment options like payment with debit and credit cards, agency fee waivers, and other incentives to retain their tenants, despite the upswing in some areas.

How long is rent to own contracts?

When considering a rent to own in Dubai, about 20% to 30% of the purchase price of the property is paid as rent for over three to four years, as written in the agreement between the buyer and the seller. Once this contract reaches its end, the paid amount will be considered as a down payment toward buying the property, allowing the investor to complete the sales of the property through cash or mortgage.

What are the pros and cons of rent to own in Dubai in 2021?

We have mentioned several pros of rent to own in Dubai above, which include financial ease by saving on down payment, good capital gain, and saving on maintenance costs. However, there are some cons to this method of homeownership as well. Some of the drawbacks include:

  • Rejection of home loan
  • Financial challenges in case of sudden job loss
  • Lower property value than the agreed fixed price
  • Legal clauses and penalties if you do not buy the house as per the contract

However, many of these drawbacks can be avoided if you carefully read the terms of the rent to own contract and pursue your next steps according to that.

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