1. What is the Buy vs Rent Breakeven Calculation?

The breakeven analysis helps determine when buying a property becomes more financially advantageous than renting in Dubai's real estate market. It calculates the annual cost difference between buying and renting.

2. How Does the Calculator Work?

The calculator uses the breakeven formula:

Where:

• \( Purchase\ Price \) — Total property purchase price in AED
• \( Closing\ Costs \) — All associated purchase fees in AED
• \( Rent\ Savings \) — Annual rent amount you would otherwise pay in AED
• \( Years \) — Time period for comparison in years

Explanation: The equation accounts for the total cost of ownership spread over time, offset by the rent you would have paid.

3. Importance of Breakeven Analysis

Details: Understanding the breakeven point helps make informed decisions about whether to buy or rent in Dubai's dynamic real estate market, considering your planned duration of stay.

4. Using the Calculator

Tips: Enter all values in AED. Be sure to include all closing costs (typically 4-7% of purchase price in Dubai). Rent savings should reflect current market rates for similar properties.

5. Frequently Asked Questions (FAQ)

Q1: What's a good breakeven point in Dubai?
A: Typically, if breakeven is under 5-7 years, buying may be favorable. Over 10 years often favors renting.

Q2: What closing costs should I include?
A: Include DLD fee (4%), agent commission (2%), mortgage fees (if applicable), and other administrative costs.

Q3: Should I include maintenance costs?
A: For more accuracy, you could include annual maintenance (typically 1-2% of property value) in your rent savings calculation.

Q4: How does Dubai's rental yield affect this?
A: Areas with higher rental yields (5%+) typically have shorter breakeven periods than lower-yield areas.

Q5: What about property appreciation?
A: This simple model doesn't account for appreciation. For complete analysis, consider consulting a real estate professional.