Long-term vs short-term rental in Dubai: a comparison

An investor in Dubai can rent out a property on a long-term or short-term basis. The two strategies do not require the same level of involvement.

Long-term rental

The lease is generally annual and the rent is often paid via staggered cheques. The contract is registered in the "Ejari" system. Management is lighter, income is predictable and vacancy is limited to tenant turnover. Rent increases at renewal are governed by a reference index and a notice period.

Short-term rental

This involves renting by the night or week to travellers. Gross income can be higher than with an annual lease, but it fluctuates with the season and occupancy. It requires handling guest check-in, cleaning, communication with travellers and furniture renewal.

The regulatory framework

A short-term rental requires a "holiday home" permit issued by the tourism authorities, and some buildings impose their own rules. Tourist taxes per night apply to travellers. It is necessary to check that the building and its owners' association allow this activity before buying.

Comparing net yield

The gross income from a short-term rental must be reduced by platform commissions, cleaning, utilities, furniture, quiet periods and management fees. The net yield can be close to that of a long-term rental, or clearly higher in certain well-located buildings.

How to choose

• Limited time available and a preference for stability: long-term.
• A very well-located property, in a tourist area, with a competent manager: short-term can make sense.
• Occasional personal use: short-term offers the flexibility to block off dates.

The importance of a good manager

In both cases, a reliable local manager protects the property and its income: tenant selection, payment tracking, maintenance and compliance. Their cost should be factored into the yield calculation.

To review your project and check the conditions currently in force, book an appointment with Arzouni Properties.