Value-driven options rare in the rental market

Value-driven options rare in the rental marketImage Credit: Supplied

Everyone is always on the lookout for value-driven options in any form of investment as they are the ones in which you would be paying an amount less than what the investment is truly worth. In simple terms, it means getting a great deal. In the UAE rental market, this would involve securing a rental property for a rate below what either you or market forces claim that it should cost.

One way to do this is to secure a property through a long-term rental agreement, that is, agreeing to remain a tenant in the property for a longer period in exchange for a fixed rental price over that period. Doing this requires research and foresight.

All around the UAE, especially in the capital and neighboring Dubai, value-driven options have become a rarity as the removal of the rent cap in Abu Dhabi saw a 10 percent increase in rental rates in prime locations of the city, according to CBRE.

On the Dubai side, a lot of landlords had ridden the wave of increase in property rents immediately after the announcement of the emirate's succeeding in its Expo 2020 bid. Tenants who had been living in relatively more affordable areas like Al Qusais, Al Quoz and Al Nahda before the Expo 2020 bid win have somehow been protected from the sudden rent spikes in key Dubai locations, although in general, rental rates in the city have gone through a period of increase.

The continuing influx of new properties should gradually lessen demand for other properties and help in lowering rental prices. If you are able to time your move just right to coincide with the release of new properties, you could still secure a great rental price and save yourself a significant amount in the long term.

With prices across-the-board set to soar in the coming years, value-driven options will be harder and harder to find. Previously, lower-cost areas such as Sports City, International City and Discovery Gardens have seen rental values increase by 41%, 35% and 33% respectively year-on-year according to the Q1 2014 report of Jones Lang LaSalle. Therefore, if you're looking to lock in a good rental price, it's time to start planning for the next few years now.

Handy Hints:

• Secure a unit through a long-term rental agreement to get value for your money

• Abu Dhabi saw a 10 percent increase in rental rates in prime city locations

• Sports City, International City, Discovery Gardens have seen remarkable increases

Source: Nicholas Baker, Special to Properties

The writer is a freelancer


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