Are Rent-To-Own Properties A Good Choice For Real Estate Investors in Dubai?
Rent-to-own units are becoming famous in Dubai, but not many people understand what it is. Rent-to-own units involve the investor buying the unit from the developer by paying on a monthly, quarterly, or annual basis, as agreed in the agreement. As of now, very few developers in Dubai offer this type of financial buying method.
Rent-To-own Trend Rising In Which Areas And Why?
Whenever there is high demand in the property market, developers rarely offer rent-to-own options in Dubai. But whenever there is a high supply in the Dubai real estate market, developers usually offer a second option as rent to own to sell the stock and move forward. These types of options are more seen in far off-projects like Dubai Land which is situated far from Dubai.
Reasons Behind The Rise And Fall In Rent-To-Own Trend
Many factors influence the rise or fall of rent-to-own properties in Dubai. Some of the factors are as follows:
- Economic Conditions- Economic conditions such as economic stability, job growth, and unemployment rates can affect the rent-to-own trend in Dubai. In a strong job market where economic conditions are stable, more individuals may afford the rent-to-own method, leading to a hike in the trend. On the other hand, with a high unemployment rate in a downturn of the economy, a smaller number of people will be able to afford the method which will lead to a decrease in the trend.
- Housing market conditions- Rent-to-own factor can be highly influenced by affordability and availability of housing. If home prices are increasing at a high rate or if there is less availability of affordable houses, more and more buyers may like to opt for the rent-to-own options in Dubai to achieve homeownership. On the other hand, if home prices are decreasing or if there is over-saturation of the housing market, there will be low demand for the rent-to-own method which will result in a fall in the trend.
- Interest rates-The fluctuation in interest rates can influence the rent-to-own trend. If the interest rate is high, the rent-to-own method will be in high demand where buyers will lock the home purchase price and avoid paying a high rate of interest resulting in a rise in the trend. On the other hand, if the interest rates are on the lower side, the affordability to buy the home outright will be a more feasible option which result in a fall in the trend.
Which Nationalities Are Keener To Choose The Rent-To-Own Units?
There are no such countries particularly that are keener to choose this kind of unit. The main thing is that all this depends on who needs it the most. Lately, Russians, certain Arab nationalities, Indians, and Pakistanis have opted for this method more often.
Type Of Units Investors Prefer To Rent-To-Own
Those who want to buy their home, but do not have that much financial means to buy it right away, are keener to opt for the rent-to-own units in Dubai. Usually, townhouses or single-family homes are the types of properties in which the buyer is keener to opt for the rent-to-own option.
In some scenarios, the buyer may be keen to opt for the rent-to-own option. However, these kinds of scenarios are less common, and also the eligibility requirements may be stricter. So, usually, the buyers who are keen to go for the rent-to-own option are looking for units that meet their future and current housing needs which they can eventually own.
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