Financial readiness

First, you’ll want to take an honest look at your current finances. Owning property requires significant upfront and ongoing costs. Be sure you can afford these expenses on top of having emergency savings as homeownership costs tend to be less flexible than rental costs.

Key numbers to consider:

• Down payment: You’ll typically need at least 20-25% of the purchase price for a down payment on a home in the UAE. This means that if you purchase an AED 1 million property, you’ll need around AED 200,000-250,000 just for the down payment.
• Mortgage payments: Your mortgage payments may be higher than an equivalent rental amount, at least early on. Be sure you can manage this amount plus associated housing costs month-to-month.
• Emergency fund: Experts recommend having 3-6 months of living expenses saved as an emergency fund before buying a home. This gives you a buffer in case of any financial hits.

If buying seems financially out of reach for the moment, renting can allow you time to save and prepare.

Family size needs

Consider your current and future family size needs when deciding between renting and buying. Will your family grow soon? Do you anticipate needing a larger space in the next few years?

Renting can make more sense for rapidly growing families that expect to outgrow a space quickly. It allows flexibility to upsize on short notice. Homeownership typically requires a longer commitment to a property.

Neighbourhood amenities

Evaluate the family-friendly amenities available in neighbourhoods you’re considering for either renting or buying. Look for features like parks, schools, playgrounds, pools, community centers, hospitals and clinics.

School quality

School quality and access are among the top priorities for most families. Thankfully, the UAE offers a range of public and private school options across prime locations and at different price points.

If school location is important to you, map out rental options in those school zones at your target price point. Also, check home resale values in those areas. A location near high-quality affordable schools can impact demand.

Long-term plans

Consider your long-term plans when deciding whether to rent or buy. Do you plan to stay in the UAE permanently? Do you see yourself moving every few years for new jobs or opportunities overseas?

For those settling here permanently, buying often makes sense to secure housing without the worry of rising rents or lease non-renewals. You can customise your living space to suit your lifestyle.

Frequent movers may want to continue renting to allow flexibility. You can change locations and housing types readily when renting.

Investment potential

In the UAE, buying property can be a smart investment over time, beyond just meeting housing needs. Values may rise substantially, especially in sought-after areas. If renting, you can lose out on possibly sizeable gains.

Speak to a financial advisor to explore whether buying an investment property could be a strategic move for your family’s financial future.

The rent vs. buy calculation

Crunch the numbers to see which option truly makes more financial sense by using a rent vs. buy calculator tailored to UAE expenses. Factor in savings, ownership costs, rental rates, investment returns on down payment amounts and property appreciation.

Seeing the math laid out can help provide needed clarity if you feel stuck going back and forth on whether renting or buying fits best.

Trust your gut

At the end of the day, go with your gut instinct on renting vs. buying after weighing all the logical factors and doing your research. You know what feels right for your family. See which aligns better with your family’s needs and priorities—both now and years down the road.