Dubai Real Estate- Rent-to-own property-try before you buy

Rent-to-own property-try before you buy

 Prospective owners are not forced to buy property before having lived in it.

The rent-to-own scheme was put in place across the UAE with hopes of jumpstarting the residential market. In effect, it works as a ‘’try before you buy’’ system where prospective property owners are not forced to commit to an apartment or villa before having lived in it, with rental payments being put towards the sale price of the property if and when the tenant decides to buy.

Whilst you would be asked to give a deposit of 10 percent based on the agreed market value of the property before you move in, the remainder of your rent will be paid in more affordable installments.

Most rent-to-own contracts require a three-year commitment although some developers offer a two-year option. The rental price is usually fixed in the first two years, but may be subject to an increase in the third year. After the time lapse, you would have to decide on whether or not you will purchase the property. Alternatively, you would have the option to cancel the contract and be simply considered as having rented the property for those years.

If it does not turn out to be your dream home and you do not decide to purchase, you may have to vacate the residence to make room for prospective buyers who may be interested in giving the property a trial run.

Real estate agencies like Smith & Ken say that this practice gives tenants extra time to arrange a mortgage during the rental period, as well as enables them to use the rental payments as investments.

Sounds ideal. But before signing a contract, make sure you know a few things: are you being charged a premium rent? What percentage of that rent will be converted into equity? What mortgage options will be available if you buy and will you be charged any penalties if you don’t? And most importantly, is the property right for you?

Real Estate Tips

The rental price is usually fixed in the first two years

This practice gives tenants extra time to arrange a mortgage

After the time lapse, you have to decide to purchase the property.

Understanding the logic of offshore trusts

Dubai Real Estate -Understanding the logic of offshore trusts

Highly effective for the purposes of estate planning tax mitigation and asset protection.

When it comes to life in general,legalities are usually the last thing on people's minds,even as most property-related predicaments involve the lack of legal foresight in relation to major life changes such as personal calamities

As anything and everything can change at the stroke of a second, there are some questions you might want to answer to check whether you need serious legal advice: Are you a resident in the UAE? Are you a partner or a shareholder in a business in a free zone or of an LLC? Do you own freehold property either solely or jointly? Do you have children? If your answer is YES to either one or all of the above, you should consider establishing a trust to protect your assets and secure your assets and secure your family's future.

A trust,properly structured and utilized, is highly effective for estate planning,tax mitigation and asset protection. Trusts are instrumental in avoiding probate,an important consideration in the Middle East,where local fixed heir ship laws can prevail. They are especially helpful in asset preservation and protection in case of political,family or business uncertainty (e.g. Unexpected divorce,bankruptcy,litigation); succession planning;consolidation and preservation  of family wealth across generations; business continuity;overcoming cost, and delay of obtaining probate;bypassing local laws with your own succession blue print; professional management of assets for the benefit of beneficiaries; a high degree of privacy and confidentiality,avoiding public disclosure of asset ownership.

To secure yourself and your property, there are few legal consultancies available which specialize in international wills,trusts and taxes that are experienced and fully qualified to advise and assist clients regarding all aspects of trust formation,management and administration . Your consultant should be able to create a bespoke solution that secures and preserves your assets in a way which is uniquely suited to your personal and business requirements, and that you will be entirely at ease with.

Dubai Real Estate Tips

Trusts are instrumental in avoiding probate especially in the Middle East

Legal foresight is essential in protecting your property and all your assets

Your consultant should create a bespoke solution suited to your situation.