Is Renting in Dubai Really a Waste of Money? Rent vs Buy Calculator Dubai

Renting in Dubai can be seen as a waste of money if you can actually own a property for the same amount. If you use a Rent vs Buy Calculator, i.e. comparing monthly rent versus monthly mortgage, you may see that it makes more financial sense to own than rent. So is it really a waste of money?
The truth is, a lot of it depends on location, the type of property you are buying, and your timeframe.
For example, renting can be cheaper if you live in a community that is more expensive to buy (we are looking at you, Downtown Dubai).
However, buying can be cheaper, if you are buying off-plan properties in Dubai. Oftentimes, these off-plan properties offer affordable payment plans that allow investors to pay the property in installments and post-pay the balance after moving in (aka post-handover payment plans). This can be a cheaper option than renting, and there’s no doubt that owning a home comes with a lot of satisfaction and pride.
Rent vs Buy – How to decide? Use a Rent vs Buy Calculator Dubai
A Rent vs Buy Calculator can help you understand how both renting and buying will impact you financially. We particularly like this calculator from Property Finder as it factors in the length of stay, the upfront fees of buying a property in Dubai, and how much you will save if you rent versus buy.

Note: This calculator does not include service charges, property insurance, valuation fee, maintenance expenses, life insurance (mortgage requirement) etc. It’s typically 7-8% of the property value.
Do factor these in your calculations (see post here on all extra costs), and see if which one makes better sense financially for your time frame.
Other Factors to Consider:
1. How long do you intend to live in Dubai?
If you rent for decades, you can potentially end up paying more than if you were to buy a property. This is because rent typically increases while a fixed-rate mortgage payment reminds the same.
Under “Length of Stay” from the Rent Vs Buy Calculator, you can calculate when renting becomes more expensive than buying based on your budget. Generally, if you plan to call Dubai home for the long run, say 5 to 7 years, buying may be worth considering.
2. If you decide to leave Dubai, will the potential rent cover your mortgage payments, service charges, and other unforeseen expenses?
Obviously, we do not want to sell our property when the market is declining or at the bottom of the market cycle. But are you prepared to go through a downtime where the property value may be lower than your purchase value and you cannot sell?
3. Do you have enough liquidity in case your circumstance change?
Are you putting all of your liquid funds into a down payment? Are you comfortable with paying the mortgage for the loan duration, and do you have any liquidity to pay off the loan faster? Buying a home comes with a lot of upfront expenses, and it will take years for you to break even. You don’t want your money to be tied up, or be forced to sell and make a loss.
4. Are you comfortable carrying a mortgage, or do you prefer a debt-free life?
Debt is much more than just money and can have huge effects on us psychologically. If we are constantly worried about job security and paying off our bills, it is natural to feel worried and stressed about how we will be able to pay them off. Having a greater peace of mind knowing you are debt-free is something you cannot buy.
Final Thought
Oftentimes, many investors decide to buy based on the notion that “owning is always better.” However, as with every financial decision, there will always be an opportunity cost.
Buying a home gives you ownership, privacy and equity, but you will have to take care of repairs, maintenance costs, and service charges which can be time-consuming and costly.
Renting is less capital intensive, less maintenance, and more flexible, but you may have to deal with rent increases, moving out, or a difficult landlord.
Renting vs. buying isn’t a once-in-a-lifetime decision. If you can’t afford to buy one yet, honestly, that’s okay! You can always revisit the question at any time if you experience lifestyle or financial changes.