All You Need to Know about RERA Rent Calculator in Dubai

There is no shadow of a doubt to include Dubai in the list of the most posh and lavish cities in the world. Its reliable economy and booming real estate ceaselessly continue to derive investment interest on a global scale. This, in turn, generates immense employment across varied industries in the city, leading to huge settlements that are always on the lookout for rental options.

The existence of top property developers and their projects that are spread throughout the city has further popularized rental options, leading to an exponential growth of the real estate sector. As such, when it comes to figuring out the cost of living in Dubai, rent is undeniably the biggest expense. With so much demand for rental properties, the need for a fair rent calculating system is mandatory. 

This is why the Real Estate Regulatory Agency (RERA) has developed a rental calculator that comes to the aid of landlords and tenants and helps them understand whether the rental amount is higher or lower than the apt scale. To help you get familiarized with the same, we are providing an all-inclusive guide to this calculator so that you can thoroughly understand the factors that influence the rental amount.

An Overview of RERA

RERA stands for Real Estate Regulatory Agency and serves as a governmental agency that regulates the real estate sector of Dubai. As the regulatory arm of the Dubai Land Department (DLD), it is tasked with providing an effective and transparent legal framework for all property dealings in the city. It was founded in 2007 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE and the Ruler of Dubai.

From licensing all real estate activities to publishing studies for the sector, from providing licenses to real estate agents to registering rental agreements, from managing the trust accounts of real estate developers to regulating real estate advertisements in the mass media, the RERA is a multi-faceted body that handles it all. To boost mutual cooperation, it also facilitates supporting sectors such as law firms, banks, and insurance. 

RERA is the go-to solution for settling disputes among developers, buyers, and sellers and has created several forms to simplify real estate transactions in the city. To streamline the real estate activities in Dubai, it has launched several initiatives in collaboration with the DLD, such as the Dubai Rest App, Dubai Broker App, Trakheesi System, Ejari System, etc. Our topic of discussion - the RERA Rent Calculator – is also one of such initiatives. 

What is the RERA Rent Calculator?

The RERA rent calculator is an online service that helps maintain transparency in rental transactions of properties in Dubai. It is a user-friendly and easily accessible service that was introduced in December 2013 as a means to curb illegal rental increases and put a cap on rental prices. With Decree No. 43 of 2013, His Highness Sheikh Mohammed bin Rashid Al Maktoum helped set a limit on the annual rent increases for all properties across Dubai.

This rent calculator works in accordance with the RERA rental index which is annually updated. It is a system that has been designed to protect both landlords from ensuring they are charging rent that is within the confines of the law and tenants from getting overcharged. Essentially, it helps in building a fair, mutually beneficial, and healthy relationship between landlords and tenants. 

If you are considering opting for a rental property or want to put your property on rent, you need to check out the average annual rental index through the RERA rental calculator. This system enables landlords and tenants to put the details of their property and accordingly provides results to show if the property rental increase is apt or not. 

How does the RERA Rental Index Work? 

The RERA rental index is a scientific way to determine the fairness of the rental price of a property. It takes into consideration a wide range of factors such as the location of the property, the type of the property, and the number of rooms, among others. 

Whether you are renting a studio or 1-br apartment, a villa or a commercial property, being aware of the rental cap will help you from unfair practices. The following mechanism is used to determine the applicable increase in rent.

• If the rent of the property is 10% lower than the estimated market value, then there is no increase in rent.
• If the rent of the property is 10-20% below the market value, then the increase in rent can be up to 5% at most.
• If the rent of the property is 20-30% lower than the market value, then the increase in rent can be up to 10% at most.
• If the rent of the property is 30-40% less than the market value, then the increase in rent can be up to 15% at most.
• If the rent of the property is less than 40% of the market value, then the increase in rent can be up to 20% at most.

Please note that the aforementioned figures are subject to change. Please stay updated with any changes irrespective of whether you are a landlord who is renting out a property or you are a tenant who is looking for a rental property to live in. 

When you put in the current value of annual rent on the RERA rental index calculator along with the end date of the contract, you will be shown the amount that has to be increased in the annual rent, if you wish to renew the tenancy contract. Please keep in mind that the annual rent values don’t include water bills, electricity bills, or any other allied bills.

The RERA rent calculator makes complex calculations extremely easy, which brings us to our next topic of discussion - how to use the RERA Rent Calculator.

How to Use the RERA Rent Calculator?

If you are thinking of renewing a commercial lease or a residential property, then you need to refer to the RERA rent calculator as it will help you compare the price of your property’s rent with the average cost of similar properties in and around your area. 

To use the RERA rent calculator, you can head to the official website of RERA RENT Calculator which will assist you in figuring out the yearly rent estimation. You can also use the Dubai Rest App to calculate the rental increase. 

Once you open the website or the mobile app, you need to fill out the info to know the average annual rent as per the market trends. You will find several tabs, all of which are different ways to use the RERA rental price calculator. 

For instance, if you select the ‘Title Deed Number’ tab, then need to put in your certificate year, current rent, and other allied information to assess the apt rental increase. Similarly, if you select the tab of ‘Ejari Contract Number’, then you just need to enter the contract number, and your current rent and the amount that needs to be increased will be shown.

If you select the ‘Residential’ tab, then you have to enter the lease contract end date, the type of residential property type (apartment or villa), the area you are living in, the number of bedrooms in your property, and the present annual rent if you are already living in the rented property. You can leave the current rent information empty if you are not currently living in rent. 

Next, you need to click on ‘Calculate Rent’ and you will be shown the average annual rent based on the current market trends. Landlords and tenants can use this to enter into better rental negotiations and get clarity on the market trends of the real estate sector of Dubai. 

Benefits of Using the RERA Rent Calculator

The RERA rent calculator facilitates transparency in the rental real estate sector in Dubai. It has been deemed as the benchmark for accuracy and fairness for apt rates of rental properties across the city. As such, residents of the city heavily rely on it. Here are some of the major benefits of using the RERA rent calculator.

Legal Compliance

The RERA rent calculator makes sure that both the landlord and the tenant are complying with the current rental law of the city. 

Time-saving

As the calculator simplifies the leasing process, you get accurate and quick results, saving significant time as well as energy for both parties. 

Fairness to Landlords

It helps ensure that landlords are getting a fair and apt charge and rent rate as per the market trends. 

Security to Tenants

It protects tenants from unfair high charges and keeps them away from rental malpractices.

Informed Decision-making

Since the calculator offers accessible and clear data, you get meticulous market insights that help both landlords and tenants enter a fair negotiation process.

To Conclude

The RERA rent calculator provides transparency and facilitates legal compliance, serving as a benchmark for reliance in the real estate market of Dubai. Tenants can use this to know whether they are being unfairly charged by their landlord, while the landlords can use this to know whether the amount they are charging is within the legal boundaries of fair rental practices.

Each year, many people move to Dubai for varied reasons and the demand for rental properties is always everlasting. With a high demand for rental properties in Dubai, the need for a government-approved system to determine fair rental charges is paramount. 

This calculator does exactly that and ensures fairness in the highly competitive real estate market of the city. Therefore, if you are renting out a property to others or renting a property to live in, please refer to this calculator and give yourself maximum security and fairness. 

FAQs

Commonly Asked Questions about RERA Rent Calculator

What is the RERA Index in Dubai?

The RERA index is essentially a database managed by the DLD that helps provide the average rate of rental properties across different locations in Dubai. 

How is the RERA rent increase calculated?

The RERA rent increase is calculated in accordance with the rent of the property and the current market trends. Once you enter the property type, certificate number, contract expiry date, certificate year, and your current annual rent, then you will be shown the apt increase in rent that should be charged.

How much rent can be increased as per RERA?

If the rent of the property is 10% lower than the estimated market value, then there is no increase in rent. If the rent of the property is 10-20% below the market value, then the increase in rent can be up to 5% at most. If the rent of the property is 20-30% lower than the market value, then the increase in rent can be up to 10% at most.

If the rent of the property is 30-40% less than the market value, then the increase in rent can be up to 15% at most. If the rent of the property is less than 40% of the market value, then the increase in rent can be up to 20% at most. Please note that these figures are subject to change.

Can a landlord increase rent by more than 5% in Dubai?

Yes, a landlord can increase rent by more than 5% in Dubai if the rent of the property is more than 20% lower than the market value.

Is it legal to increase rent every year in Dubai?

It is legal to increase rent once a year, but the tenants must be notified by the landlords 90 days in advance so that they can prepare themselves accordingly.