Short-Term Rentals / Leasing benefits Dubai Landlords

Short Term Lettings / Rentals in Dubai

 Short-term rentals are becoming increasingly popular in the UAE. It allows landlords to consider renting their units for a few days or a few months and not restrict them into a long-term, 12 months rental contract. This can be very beneficial when owners are also wanting to sell.

Demand for short-term rentals come from both leisure tourists as well as the corporate traveler. There is also demand from residents. For example, people working in Dubai often need a shorter term than one year while they are moving to another emirate or perhaps looking for a more permanent place to buy or rent.

The earning potential can be between 25 to 40 per cent above a long-term rental and sometimes more. The rents received depend on the season, price and location of the property. Usually, the demand is higher in more central, prime or beach areas, or those close to a shopping mall or any entertainment or touristic attraction. The highest earning areas are Dubai Marina, Jumeirah Beach Residence, Palm Jumeirah and Downtown Dubai. However, other areas are beginning to catch up.

 
Benefits for Landlords

• Increased rental income

• Reduced vacant periods

• No long-term tenants to evict

• Not tied into long term contracts

• Flexibility to keep marketing the property for sale

• The contracts do not need to be registered with Ejari

• Opportunity to use the property themselves for a holiday home

• Demand will increase with Expo 2020. Short-term rentals are the future

Companies like Keller Williams Real Estate and associated firms can list / advertise your apartment / villa, deal with guest management, cleaning and maintenance, property management, photography and internal styling and presentation.

Benefits for Tenants / Occupiers

• More cost effective than hotels

• No utility bills to pay or furnishings to be done

• Property is controlled and well maintained constantly

• Ideal for corporate traveller and people new to Dubai

• Families can all stay together rather than in separate hotel rooms

• Less legal documents needed than a 12 months’ long-term tenancy

• Easier cash-flow than paying 1 or 2 cheques for 12 months’ tenancy

Landlord’s Costs or Investment

Property owners need to furnish the property to an acceptable standard before being rented out short-term. Also, every apartment needs the DEWA and chiller to be working and Internet access.

Other costs include licensing with the Department of Tourism and Commerce Marketing that ranges between 370 to 2,000 AED depending on the property's size, as well as home insurance which ranges between 500 to 1,000 AED per year. Listing Agents / Management Agents will have fees.

Laws and the Requirements for Short-Term Rentals

Executive Resolution – Short-term Rentals (including Holiday Homes)

Decree 41 of 2013 allowed landlords to only rent out their residential property on a short-term basis through a licensed corporate operator. However, in 2016 the regulations were amended to allow individual property owners to become licensed operators and to rent out their properties directly.

 Executive Resolution - of 2016

How do you register as a Short-Term Let (rental) landlord in Dubai?

To register as a short-term let operator you need to visit the The Department of Tourism and Commerce Marketing (DTCM)  website. Then complete the online application form.

 Department of Tourism and Commerce Marketing website

You have to provide information about yourself and the property you want to rent out: -

1)      Proof of ownership (Title Deed and/or DEWA document)

2)      Proof of your identity (copy of Passport or Emirates ID)

3)      Select the property as being either “standard” or “delux” by referring to the list

When your application has been approved you must pay the registration fee (approximately 2,000 AED) before you can collect your licence.

When you are a registered operator of a short term let, you agree to obey the DTCM regulations that govern the short-term letting market. So you need to familiarise yourself with those regulations and ensure that you comply with your obligations at all times, to avoid exposing yourself to fines etc. for breach.

These obligations include: -

• Checking-in/ checking-out guests

• Providing a 24/7 emergency number

• Maintaining the units to the minimum required standards

• Keeping accounts

• Making payment of the various fees due to the DTCM

• Taking out insurance cover for the guests, the property and the building

• Ensuring the unit is let as a whole (separate room letting is not allowed)

• Co-ordinating with the building Owners Association

• Taking and uploading to the DTCM all guest details/ passport copies in advance of lettings

The regulations allow for individuals to register as operators.  However, many owners still prefer to retain corporate licensed operators to arrange short term lettings and assume responsibility for compliance with the DTCM regulations.

Corporate operators are not only licensed by the DTCM but also by the Dubai Department of Economic Development. They are usually more experienced in this field and have the personnel and resources necessary to be able to furnish and maintain your unit to the requisite standards, deal with the mechanics of daily guest check in / check out, upload guest information, replenish and refresh units immediately after each stay and ensure that all accounts are kept up to date and payments made on time. Corporate operators will charge a fixed amount or a percentage of income for their services.

The short-term rental market is growing and will be the future of rentals/leasing in Dubai.