The real estate market is growing, and some homeowners and investors are choosing to rent their properties for holiday periods instead of long-term rentals to maximize their gains. Renting a property for short periods of time gives you a higher income per night, especially in tourist locations.
But, are Holiday Rentals actually worth it? If so, how do you get started?
Let’s break it down
Is it worth it?
- Flexibility: Owners can block specific dates for personal reasons, raise prices during peak season, and adjust the calendar based on their needs.
- Travel Trends: Remote work, weekend gateways, digital nomads, and conventional tourists are increasing in Dubai, which causes the demand for short rentals to increase.
Things to consider
- Necessary Expenses: Cleaning services, guest check-ins, communication and planning are some of the things that are required in holiday rentals.
- Basic Maintenance: Furniture, bills, and regular upkeep costs.
- Income: The income is not guaranteed every month; it will vary depending on the season, mostly.
- Extra Legal Regulations: Dubai has rules and procedures that you must follow to operate legally.
How to start a Holiday Rental
Before considering this option, please check that the building or community allows it; some buildings don’t allow short rentals.
1.- Own or Lease an Eligible Property: You can either own an eligible property or have a written approval from the landlord of the property you wish to rent as a holiday home. Along with that, the property must be in a freehold area like Downtown, JBR, or Palm Jumeirah.
2. Register the Property: Register the property with the Dubai Department of Economy and Tourism to obtain a legal license to operate. You can apply for an individual license (1-8 properties) or a professional one (9+ properties).
3. Pay the Licensing Fee: Licensing fees start around 300 AED, plus you need to pay the registration fee. These prices vary depending on the property type.
4. Prepare the unit: In order to rent the property, the unit must meet certain standards, including furniture, internet, bedsheets, towels, a fire extinguisher, a first aid kit, and a smoke alarm.
5.- Post your property: After you get all the necessary papers and meet the requirements, your property is ready to be posted on short-rental platforms.
6.- Manage the property: As a host, you must: provide guest support, maintain the property clean and functional, pay the Tourism Dirham Fee to the DET (10+ AED per night), and ensure guest satisfaction in general to stay in this competitive market.
So, is it Worth it?
Yes, if you are well prepared. Holiday rentals can bring more income, more flexibility, and better ROI than normal renting, but as we have mentioned they require more steps and procedures. In conclusion, if you are willing to do the whole process, and create an organized and good strategy it can bring a strong income.
FAQs
What is the Tourism Dirham Fee?
It’s a fee paid by guests that you must collect and pay monthly to the DET via the Holiday Homes portal.
Is insurance required for holiday home rentals?
In some communities, it is recommended and sometimes requested that homeowners and liability insurance be purchased, specifically one for short-term rentals.