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Buying Vs Renting

Useful information if you're deciding whether to rent or buy.

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What will this article tell me about?

  • The pros and cons of buying
  • The pros and cons of renting

Buying vs renting

Helping you make an informed decision.

Should you buy or should you rent? There's no right or wrong answer to this question because so much depends on your own personal situation, aspirations and financial circumstances. To help you decide which could be the better option for you right now, we weigh up some of the main pros and cons of buying vs renting.

Buying: the upside 

  • Investing in your future
    Once you've paid off your mortgage, you'll own your home outright. And if property prices have risen, it could also be worth more than what you paid for.
  • Live your way
    Because it's your home, you can do exactly what you want with it. If you want to decorate it, extend it or refurbish it, you don't have to ask a landlord's permission to make any changes. Don't forget, you might need to obtain planning permission for extension work.
  • Moving on up
    If your home increases in value, you could use the equity to move to a bigger house or a more desirable area. You also have the freedom to release some of the equity for home improvements or to fund a large expense.

Buying: the downside 

  • Saving for a deposit
    As per the Central Bank of the U.A.E regulations, a down payment of at least 20% for UAE nationals and 25% for resident expats, must be paid in advance when buying a first property for end user. So if you're buying a home worth AED 700,000, you'd need a down payment of AED 140,000 for UAE nationals or AED 175,000 for resident expats. It takes time and commitment to save such a large lump sum
  • Upfront fees
    The extra fees and expenses can soon add up, so you'll need to factor these in to your budget. They include, but are not limited to; Home Loan Arrangement fees, valuation fees, title deed registration fees and moving costs.

Renting: the upside 

  • Upfront costs
    Your landlord will often ask for an initial refundable deposit and may ask for rent payments in advance. This lump sum cost is likely to be lower than the down payment and fees needed to buy a property.
  • Freedom to move
    If you're not ready to settle down in one place, or need to have the flexibility to move around with work or family, depending on the terms of your lease, it may be quicker and easier to leave a rented property.
  • Repairs and maintenance
    If there's a leak in the roof, a broken boiler or faulty washing machine, depending on the terms of your lease, it could be your landlord's responsibility to fix and pay for it.

Renting: the downside 

  • You don't own the property
    You won't get any financial return on your money as your rent is essentially going to the landlord. So you won't benefit from any potential increase in property's value in the future.
  • Rent increases
    There's no guarantee that your rent will stay the same as your landlord has the right to review and increase your rent in the future.
  • It's not a home for life
    Many landlords will only offer tenancy agreements of 6 to 12 months at a time. If they decide to sell, they'll give you sufficient notice, meaning you'll need to find somewhere else to live.

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This link may allow you to access a non - HSBC website. HSBC Bank Middle East Limited has no control over the linked website and is not liable for your use of it.

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This link may allow you to access a non - HSBC website. HSBC Bank Middle East Limited has no control over the linked website and is not liable for your use of it.

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This link may allow you to access another HSBC Group website. Please read the terms and conditions of the linked website, which may differ from the terms and conditions of HSBC Bank Middle East Limited website.