Rent vs Buy Calculator: What’s Best for You in the UAE?

In the UAE, both rents and property prices have been going up in recent years. If you’re renting, it can feel like your money is going down the drain with nothing to show for it in the end.

In fact, Dubai has seen astronomical increase in rentals in 2023-2024, and here is an infographic providing more information;

Dubai rental increase infographic 2

Buying, on the other hand, allows you to invest in your future but comes with significant upfront costs, ongoing expenses, and a long-term commitment.

Here is the year on year price trend in Dubai for the last 10 years;(source: https://topluxuryproperty.com): As per this report, property prices in the UAE on an average grown by 45% in the last 10 years, at an average CAGR of 3.78%.

Rent Vs Buy - Dubai Real Estate Per Sq Ft prices - yoyo - last 10 years

So how do you decide what’s right for you?

💡 Introducing BuyRent-IQ

After extensive research and hundreds of conversations with homeowners and aspiring buyers, I created BuyRent-IQ—a calculator designed to provide unmatched clarity.

Unlike generic tools, BuyRent-IQ goes beyond simple cost comparisons to offer insights that factor in cash flow, opportunity costs, and the unique dynamics of the UAE’s real estate market.

What Makes BuyRent-IQ Unique?

✔️ Compare Total Costs: Understand the long-term cost of renting vs buying.
✔️ Analyse Cash Flow: Helps you differentiate the costs and cashflows and plan more efficiently. 
✔️ Factor in Opportunity Costs: Evaluate the potential returns you could achieve if the down payment was invested else where instead of tied up in property.
✔️ Tailored to You: Adjust inputs like rent, property price, mortgage rates, and stay duration for personalised insights.

🛠 How to Use BuyRent-IQ

1️⃣ Enter Your Details: Input key information such as the rent you’re paying or planning to pay, desired property price, down payment percentage, and mortgage interest rate.

2️⃣ Customize Other Costs: Fine-tune additional factors like maintenance fees and planned stay duration to tailor the analysis to your situation.

3️⃣ Let BuyRent-IQ Do the Math: The calculator automatically computes opportunity costs, total costs, and cash flows, giving you a comprehensive breakdown.

4️⃣ Compare and Decide: Review detailed insights comparing renting and buying, and confidently choose the option that best aligns with your financial goals and cash flow preferences.

It’s quick, simple, and designed to give you financial clarity for one of life’s biggest decisions! 🚀

Rent vs Buy Calculator

Buy vs Rent: Cost and Cash Outflows Comparison

 

Results

 

Disclaimer: These calculations are for illustrative and educational purposes only and should not be considered as financial advice. While every effort is taken to ensure that fees, assumptions, and other aspects are kept up-to-date, the results may still vary significantly depending on your specific circumstances. Factors such as taxes, market conditions, inflation, changes in rent and interest rates, and unforeseen expenses can impact the final outcomes. Additionally, these calculations do not account for potential investment opportunities, risks, or other financial complexities. For personalized and accurate guidance tailored to your unique financial situation, it is recommended to consult a qualified financial advisor.

Click here to book a Discovery Call Now

How Does the Calculator Work?

This tool evaluates the total cost of renting and buying over your chosen period. Here's what it considers:

  1. Property Costs:

    • Down payment
    • Mortgage interest
    • Annual maintenance fees

  2. Rent Costs:

    • Annual rent
    • Opportunity costs of savings

  3. Fees and Charges:

    • Land department fees
    • Real estate commission
    • Mortgage registration and processing fees

  4. Opportunity Costs:

With these comprehensive calculations, the calculator determines which option—renting or buying—is more cost-effective for the time you're planning to stay.

Key Factors to Consider

Renting:

  • Flexibility: Renting is ideal if you're planning to stay short-term or need flexibility to relocate.
  • Lower Upfront Costs: No need for a hefty down payment or closing fees.
  • Limited Investment: Monthly rent payments don’t contribute to building equity.

Buying:

  • Long-Term Savings: Owning a property can be cheaper in the long run, especially in stable markets.
  • Equity Building: Mortgage payments build ownership over time, increasing your net worth.
  • Additional Costs: Buying comes with maintenance, property taxes, and other ongoing expenses.

FAQs

1. How accurate are the results?
Our calculator provides indicative numbers for educational purposes. The final costs may vary depending on fees, taxes, and market factors. For personalized guidance, we recommend consulting a financial advisor.

2. Does the calculator account for future changes in rent or interest rates?
No, it does not. Future changes in rent or interest rates can significantly affect the comparison. However, this tool gives you a baseline to start your financial planning.

3. What if I’m planning to invest the down payment some where else instead?
The calculator includes opportunity costs to reflect the growth potential of your upfront payment if invested instead of used for buying a property.

Why Renting vs Buying is a key consideration in the UAE?

In UAE, where the real estate market is dynamic, understanding the trade-offs between renting and buying is crucial. With zero income tax and a vibrant expat community and high capital appreciation opportunity, buying a property can often be seen as a long-term investment. However, renting offers flexibility and lower upfront costs, making it a preferred option for short-term residents.

Our Rent vs Buy Calculator is specifically designed to cater to expats and residents in the UAE, factoring in regional nuances like mortgage registration fees and maintenance costs.

🚀 Take Control of Your Financial Future

In a dynamic real estate market like the UAE, the decision to rent or buy is one of the most significant financial choices you’ll make. BuyRent-IQ empowers you with the insights you need to make the smartest move for your future.

Ready to start?

Book a Discovery call to have a one to one discussion helping you decide the best course of action.


Click here to book a Discovery Call Now

 

Further reading