Saturday, September 01, 2007

A rental market opportunity

The Gulf News today has a nice description of the way landlords will try to get around rent controls. In RAK the government has gone so far as to make it difficult to tear down your apartment building -- one device landlords use to evict tenants who were renting at controlled below-market rates.

The latest scheme is to buy out the tenants. This doesn't produce a gain for the landlord if the tenants would simply turn around and rent the same apartment for at the market price (the buyout to the tenant is the same as the change in the rent in this case). It does work if at the market rate the tenant would move to a lower quality apartment.

Here's a bit of the GN report
This new tempting tactic has recently spread in RAK where tenants are being promised money to evacuate houses and shops they had taken on rent long time ago.
Officials said some of the tenants in the key areas in the emirate have been recently moving to remote areas including Shaam, Al Jeer, Al Rams and Ghaleelah where they find cheaper houses and at the same time benefit from the money they get from the landlords to evacuate.
Officials said the landlords do pay the expenses their tenants take to move their furniture and in other cases, the tenants sell their old furniture in excellent deals to their landlords who later dump such furniture in the garbage.

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Anonymous Dubai Property said...

The land lords and the owners of properties are allowed only to increase the rent by 15% annually. This was a move by Sheikh Mohammad Bin Rashid Al Maktoum, Dubai Crown Prince, UAE Defense Minister and Chairman of the Dubai Executive Council as the expansion of the real estate sector has always attributed to the increase in the rent of both commercial as well as residential properties which in turn had made living in Dubai quite expensive.

4:38 PM  

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