Short-term property lets in Dubai can net owners more than three times the annual rental returns compared to a long-term leasing option.
An infographic produced by GuestReady Dubai shows the most lucrative areas for studio homeowners to choose along the red line of Dubai Metro – from City Walk down to Jumeirah Lakes Towers (JLT).
Highest annual returns of AED180,000 can be found in City Walk for a short-term lease. This compares to AED110,000 for a long-term let.
And it’s a similar story right down the line, with DIFC (AED138,000/AED60,000); Burj Khalifa/Dubai Mall (AED135,000/AED70,000); Business Bay (AED128,000/AED50,000); The Greens (AED120,000/AED50,000); and Dubai Marina (AED135,000/AED60,000).
JLT showed the greatest difference between the two letting options (AED80,000), with long-term lets netting AED50,000 and short-term AED130,000.
Reem Al Khatib, managing director, GuestReady Dubai, said: “On average, our studio apartments gross AED 11,000 a month compared to AED 5,000 per month if they are leased out long-term. This takes into consideration the furnishing cost and management fees of short-term rentals. Short-term leasing gives greater flexibility on how the property owner chooses to use their home.”
Al Khatib explained that short-term leasing was increasing in popularity because of more than just the finances involved. Homeowners can reserve the property for their private use; they can host friends and family or even just stay at the property themselves without losing out on any potential income.
She said: “Another benefit, which is often overlooked, is the diversified risk offered by short-term rental companies through property management. All guests are thoroughly screened with ID checks. Rental platforms that we work with at GuestReady have insurance coverage for any damages that may occur. Airbnb, for example, has a $1 million insurance guarantee.”
Meanwhile, with schools set to close early next month the region is ready for its traditional seasonal exodus as expats escape the summer sunshine.
Hadi Moussa, Airbnb head of EMEA partnerships confirmed that there has already been a noticeable spike in guest arrivals in early June as compared to the previous month.
“On Thursday, June 6, more than 2.5 times as many guests have checked into an Airbnb home in Dubai as the Thursday two weeks before,” Moussa said.
But homeowners looking to make a quick profit over the period have been warned to think long and hard against placing their property up for a short-term summer let.
Vinayak Mahtani, CEO of holiday home management company bnbme, told Arabian Business: “To be fair, I don’t see the viability of putting your personal property on the vacation rental only for the summer. There is a lot of work in getting a property ready for the short term market.
“You should only consider putting your property on the short term market if it is not your primary home and you are not looking to use it for more than 180 days a year,”
This includes the purchase of a unit permit from Dubai Tourism Commerce and Marketing Department (DTCM), which ranges from AED370 for a one bedroom or studio property, through to AED1,270 for four bedrooms and above.
Before the permit is issued, a raft of standards must be met, such as the provision of a prayer mat, a safe, specific types of mattresses and all of the owners’ personal belongings need to be taken out.
However, Al Kahtib disagreed and believed it was a move worth making to generate extra income over the summer.
She said: “Maintaining the occupancy rate during the hot summer months continues to be a challenge for short term rent in Dubai. But with larger number of corporate travelers coming to Dubai, occupancy rates above 70 percent can be achieved by targeting business travellers. Renting out your property on the short-term rental market is an attractive option for landlords looking to make some extra income while enjoying the summer abroad.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.