In A Tenant’s Market, Concessions From The Landlord

Aug 16, 2017

To What Extent Are Landlords Willing To Compromise To Keep Tenants?

Dubai: Housing rents are the biggest expense that hit most tenants’ budget every year in this city.

But now, the good news is that property owners are becoming more flexible with payments terms, easing some of the renter’s concerns.

An increasing number of tenants no longer face the pressure of putting the full year’s rent upfront, as landlords are now agreeing to multiple cheque payments.

There are even those who pay rent on a monthly basis.

Flexible landlord

Barry Lee Cummings, a digital marketing strategist and international speaker, considers himself one of the fortunate ones to enjoy a flexible payment term.

“We are very lucky to have a fantastic landlord who has been exceptionally reasonable for the three years we have rented his house in Jumeirah Village Triangle [JVT],” says the British national.

“Right now, we are paying monthly, although we paid in two cheques for the first two years. Our landlord wants us to take care of his investment and treats us in such a manner that we want to do that for him.”

Despite the rental market now generally favouring tenants, Cummings believes there are still greedy landlords.

“Nowhere is it seen that the general population has to take out a bank loan to pay for their rent a whole year in advance.”

He adds: “I do not think the market situation should dictate how many cheques a tenant has to pay. I have seen people struggle and take out loans to pay sums of up to Dh250,000 in one lump sum. But why should a tenant go into debt in order to live?”

Cummings believes the normal market forces do not apply in this city.

Explaining this, he says, “In most countries, landlords can’t afford to have their asset empty. They need to have someone contributing to the mortgage, so if they are asking Dh120,000 for the year and it’s been empty for a month or two, they would consider a tenant who offers them Dh100,000 instead.

Supply and demand situation

"In the UAE, some landlords have the luxury of not needing that and so they have their property sit empty for a year, but still stick to their price. 

"This will change, though, as supply outstrips demand. [There are] too many houses, [but] not enough people that can afford to live in them — it will have to change.”

Mohamed Al Musleh says paying his rent in four instalments has been a convenient arrangement for him. “Paying quarterly is certainly better than having the full amount paid at once, as this offers me some financial flexibility,” says the engineer from Iraq, who has been living in an apartment in International City for the past four years.

“However, in Dubai, it all depends on the market situation. If there is high demand in certain areas, landlords can ask whatever they want, and then the tenant will naturally go with the more affordable options, whether it is the rent amount or the number of cheques. My friend has just moved to a new flat, and he chose to pay 12 cheques, but for this he will pay a bit more on his rent.”

Market shift

As the rents are expected to continue to soften this year, Mario Volpi, chief sales officer of Kensington Exclusive Properties, says landlords are also becoming more flexible with the rental price.

“Landlords are more receptive to lowering the rent, as they see the value of receiving some income rather than keeping the property empty,” says Volpi, noting that most landlords now accept four cheques.

He says a few landlords even agree to offer full maintenance services, which helps the tenants have peace of mind in case something breaks down. “If a property requires upgrades, some landlords are even looking to modernise the property to the incoming tenant’s taste to secure a let,” says Volpi.

“Also, the start date of the contract has been extended in a few cases, something that in the past landlords were reluctant to do. For example, we took a deposit in early January for a tenancy that only officially commenced on 23rd of February.”

Russell Owen, head of agency at Chestertons Middle East and North Africa, says that while landlords have become flexible with the price and the number of cheques, the main freehold areas such as Downtown and Dubai Marina continue to sustain high demand.

“Areas like Dubai Sports City, Jumeirah Village Circle, JVT, etc., have seen the landlords making it more appealing to tenants because there is more competition as more units are available,” says Owen.

"The landlords have to keep the pricing competitive and offer multiple-cheque payment to tenants. Tenants now have more choices than in previous years; landlords don’t want void periods and so are finding ways to make their property more appealing.”

Credits to Gulf News

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