What is the RERA Rental Index Calculator & how do you use it?

What is the RERA Rent Calculator?

In an industry as volatile as real estate, it is necessary for governments and authorities across the world to have regulatory bodies that provide a reliable framework for all stakeholders. In Dubai, RERA sets policies and frameworks for Dubai’s property market to maintain a fair market, boost foreign investments and handle any issues between tenants and landlords. 

One of RERA’s most effective and important tools is the RERA rent calculator - a tool available across the Dubai that helps tenants and landlords determine whether an increase in rent is legal or not. 

The RERA rent calculator is provided with data points such as: 

• Property Location 

• Property size 

• Property category (e.g. residential/commercial/industrial/staff accommodation)

• Property type (e.g. apartment/villa)

• Current market value of the property 

• Total number of bedrooms in the property

• The end date of the contract 

• Current annual rent 

These factors are collated and compared by the RERA rent calculator to similar properties in the same area. These calculations determine whether the proposed increase in rental prices falls within the legal framework or not. 

RERA Rent Calculator reset 

The RERA rental index is adjusted and updated annually to ensure that benchmark property prices and market prices remain balanced. This also means that the RERA rent calculator is recalibrated annually. This year, it was recalibrated on March 1, and experts estimate rent surges up to 20% in the market. 

Apparently, many landlords have been facing difficulties aligning their rent increase with the RERA rent calculator; and are campaigning to elect either real estate experts to provide a different market value, or involving the DLD to calculate the prices. 

On the other hand, tenants are rallying for stricter enforcement of the RERA rent calculator. The recalibration of the calculator is the DLD and RERA’s attempt at satisfying the needs of both stakeholders, while also providing more clarity in rental price regulations. 

Benefits of using the RERA Rent Calculator in Dubai

The primary aim of utilizing the RERA rent calculator Dubai is to promote transparency in the real estate market. It benefits tenants by allowing them to verify if an increase in rent is justified while it aids landlords justify their rental adjustments within legal limits. 

There are several other benefits of using the RERA rent calculator Dubai:

• It ensures legal compliance as landlords are required to notify tenants of any rental adjustments (including an increase in rent) at least 90 days before the contract renewal date. This doesn’t leave tenants caught off guard with sudden changes to their rental contracts. 

• As the data offered is clear and accessible, the RERA rent calculator empowers all stakeholders to make informed decisions. While landlords can adjust their rent prices according to accurate market insights, tenants can negotiate their leases more effectively. 

• The RERA rent calculator also makes fact-checking and verification extremely easy for tenants when confirming whether increases in rental payments are fair. Inevitably, it promotes accountability in the real estate market. 

Step-by-step guide to using the RERA Rent Calculator

Utilizing the RERA rent calculator can be a straightforward, stress-free process. Here is a step-by-step guide on correctly using it. 

1. Gathering the required information and documents 

It is advised for both landlords and tenants to collect the required information and documents beforehand so that there are no mistakes or confusion while updating the RERA rent calculator. The information includes: 

• Property category

• Property location 

• Property size and type 

• Date of contract expiration 

• Current annual rent 

2. Accessing the calculator 

To access the RERA rent calculator, one will have to visit the DLD RERA website and click on the “Inquiry about the Rental Index” tab. They will be redirected to the calculator.  

3. Data inputs

The website will already have options to fill in the required details. Tenants/landlords will also be required to input their certificate or title deed number and year. After double-checking all the inputted data, click on the “Calculate” button. 

If tenants input their Title Deed Number, they will have to input details of their current rent, and certificate year, along with other required information. If they input their Ejari Contract Number, they will only be required to input their contact number - the RERA rental index will then display the current rent and the amount to be increased. 

4. Review results 

After receiving the calculation, both parties are free to discuss and negotiate rent increases and contract adjustments. While it is necessary that the rent increase complies with the legal limits of the RERA rent calculator, both parties can approach RERA through written communication or in the office as well. 

Understanding the RERA Rental Increase Calculator

After the annual update on March 1, tenants and landlords have been consistently referring to the RERA rental increase calculator to understand whether raising rent for a certain property is legal - along with the maximum rent increase that is allowed by the authority. 

The RERA rental increase calculator will take the aforementioned factors into account during calculation; including current annual rent, rental index, market value, and the contract end date. 

However, there are a few significant points to be kept in mind when referring to the RERA rental increase calculator. 

• Increasing a property’s rent will not be permitted if the current annual rent is less than 10% below the rental index 

• If the existing annual rent is between 11% and 20% less than the rental index, a maximum rent increase of 5% is permitted

• If the existing annual rent is between 21% and 30% less than the rental index, a maximum rent increase of 10% is permitted

• If the existing annual rent exceeds 31% below the rental index, a maximum rent increase of 20% is permitted

How to calculate rental increases with the RERA Rent Calculator

The process of calculating rental increases is the same as the regular process. 

1. One can log onto the DLD website or the Dubai REST app

2. They can click on the “Inquiry about the Rental Index” tab 

3. They can select “Access this service” and select their property type 

4. After entering all the relevant details and information, they can click on the “Calculate” button to receive their result 

Key factors influencing the RERA Rental Index

In Dubai, both the RERA rental index and the RERA rent calculator are annually updated to strike a balance in the real estate market. Certain factors that may influence the RERA rental index are: 

1. Location: This is one of the most pivotal factors in impacting the RERA rental index. Properties located in prime locations such as Downton Dubai, Palm Jumeirah, or Dubai Marina will lead to higher rent prices due to high demand from potential tenants and limited supply of such exclusive properties. 

2. Property Characteristics: While a property has many characteristics that can be capitalized on by its landlord; from the living space and maintenance to furnishing and amenities; the RERA rental index and calculator takes into account the property’s size and number of bedrooms.

3. Economic factors: Factors such as a thriving job market or foreign investment may attract more people to Dubai, thereby hiking up rental prices. Periods of economic stagnation may result in tenants shifting to more affordable areas and the potential lowering of rent. 

Overall, the RERA rental index calculator is an effective tool for Dubai tenants and landlords to determine accurate and fair rental values, calculate the permissible limit for rental increases, and ensure that each property is priced fairly.