Dubai Rental Market: Up to Dh20,000 discount on fewer cheque payments

Dubai Rental Market: Up to Dh20,000 discount on fewer cheque payments

More than 50% of payments in the second quarter were completed using one to two installments.

A recent study conducted by a property agency reveals that one and two-cheque payments are dominant in Dubai's rental market, giving tenants the advantage of securing significant discounts, up to Dh20,000, and providing them with bargaining power when negotiating with landlords. The strong demand in the market continues to allow landlords to offer favorable terms, resulting in a gradual shift towards fewer rental payments.

According to Betterhomes, a prominent property brokerage firm, one and two cheque payments constituted 29% and 28% of rental transactions in the second quarter of the year, respectively. Following closely behind were four-cheque payments, making up 26% of the market share. Meanwhile, three, six, and 12 cheque payments accounted for less than 10% each. Interestingly, both two and three-cheque payments saw a 2% increase last quarter, while four-cheque payments experienced a 7% decline.

According to Liam Dawett, the leasing manager at Betterhomes, the rise in the popularity of fewer cheque payments can be attributed to various factors. One reason is that it increases the chances of successfully securing a desired property, especially when competing against other offers in the market. Additionally, some tenants find it advantageous as it improves their cash flow by consolidating their overall living costs into single or two payments. Moreover, companies that offer housing allowances frequently prefer to pay using one or two cheques, further contributing to the prevalence of this trend.

Up to Dh20,000 rental discount

Industry experts in the property market suggest that substantial discounts of up to Dh20,000 act as significant incentives for tenants to opt for fewer cheque payments. According to Liam Dawett paying rent in one or two cheques offers several advantages. Firstly, it facilitates price negotiations during the rental agreement finalization process. Additionally, property owners often prefer one or two-cheque payments over multiple cheques from other clients, granting the tenant a favorable position and enabling them to secure the deal amidst competing offers.

Depending on the property and the owner's preferences, tenants paying in one to two installments may benefit from a rent reduction of Dh10,000 to Dh20,000 annually. On average, tenants can expect a discount of 5% to 10% when opting for fewer cheque payments, making it a tempting proposition for those seeking cost-effective rental solutions.

Affirming Dawett's views, Ayman Youssef, vice president of Coldwell Banker, highlights that tenants can potentially save around five to ten percent of their total rent amount by choosing to pay with one to two cheques instead of four or more.

Furthermore, Youssef points out several advantages of paying rent with fewer cheques. Firstly, it reduces paperwork and administrative efforts for both tenants and landlords. Additionally, it enables tenants to plan their budgets more effectively and avoid the risk of incurring late fees, as multiple cheques increase the chances of missed or delayed payments.

Youssef also emphasizes the benefits for tenants with irregular income streams, such as freelancers or self-employed individuals. Opting for one to two cheques allows them greater financial planning flexibility, aligning rent payments with their cash flow on a quarterly or semi-annual basis.

News Source: Khaleej Times

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