But, first of all, you need to figure out whether or not it even makes financial sense for you to move to a cheaper home. The following calculations can help you decide.
Calculate the cost of moving
Start the process by considering the cost of moving, which would depend on the amount of items in your home and the type of moving service you choose. For example, the average cost of moving your belongings to a new home ranges from Dh1,000-2000 for one-bedroom apartments. You can save a significant amount of money by doing some comparison shopping though platforms that allow you to get free quotes from multiple movers and packers in Dubai.
Next, take into account the various costs associated with renting a new home:
* When you get a new lease agreement, you'll have to pay 5 per cent of the total rental agreement to the real estate agent.
* You will have to register your tenancy contract with Dubai Land Department's Ejari system, for which you should expect to pay Dh215.
* Pay a 5 per cent move-in security deposit to your landlord before you move in. You can get the full amount back when you move out of house if you return it in its original state.
* When you get a new Dewa account, you'll have to pay a connection fee of around Dh110 for small meters and a security deposit of Dh2,000 for an apartment.
* In addition, you might have to face other costs such as buying new furniture, painting, cleaning, renovations, etc.
Calculate savings on rent over the next two years
You can compare the average rent range for your area with that of other areas using the Dubai Land Department's Real Estate Regulatory Authority (Rera) rental increase calculator. Once you've picked an area and decided the size and type of property you want, you can calculate the difference in annual rent, and then find out how much you'll be able to save over the next two years.
Once you've added all the costs mentioned in 'Step 1', and found out how much you can save on rent by moving, compare the two. If the amount you'll be able to save is larger than the cost of moving, then it makes financial sense to move. Otherwise, it would be better to stay in your existing home.
If you have decided to move to a cheaper home and are in the process of negotiating the rental rate, see if your landlord is willing to discuss other options like more parking spaces, waiving the rent for one or two months, the number of cheques to pay the annual rent, and free home maintenance.
When is it better to renegotiate?
If you're happy with your current home and your landlord is willing to renegotiate the rent to your satisfaction, then obviously it makes more sense to stay instead of moving to another home, which, as we've seen, can be a costly and time-consuming process. It's important to realise that in the current buyer's market, most landlords would prefer to renegotiate rental rates, especially if they're happy with their tenants. Given the growing number of vacant properties in Dubai, landlords are keen to keep good tenants because they lose a lot of money if their house stays vacant for a long period of time.
While it's currently a buyer's market, many realtors are of the opinion that prices might stabilise after the first quarter of 2019. This means that if you want to leverage the lower rent rates to upsize or save money, then now is the right time to make a move.
The writer is the co-founder of ServiceMarket.com. Views expressed are her own and do not reflect the newspaper's policy.
Copyright © 2019 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).