A Closer Look at Short-Term Rental Investments in Dubai

Dubai is a burgeoning city with a quickly expanding real estate market. New regulations have made more options possible in an ever-expanding economic sector with hundreds of opportunities for investors of all kinds. For property investors, there are many special considerations and opportunities.

As of 2015, the DTCM has changed its regulations on residential properties, allowing Dubai property holders to license residential properties as holiday homes. This allows owners to rent out properties on short-term contracts. Short-term rentals offer property holders a new source of income, improving their investments’ value and productivity. They often diverge from the usual patterns of prime real estate in Dubai, allowing property holders to gain secondary or tertiary yields. Prime, second, and tertiary markets can be defined thusly:

  • Prime real estate is a location that is in or near a larger center or business district.
  • Secondary real estate is in close (usually walking) proximity to prime real estate.
  • Tertiary real estate is property that is further toward the edge of a major city.

Like any other type of short-term lease, short-term rentals experience ups and downs in rates. Certain times of the year are busier than others, bringing more renters. For this reason, it pays to plan for times when there may not be as much activity. However, during the times when there is a greater demand for a rental property, there may be a significant increase in revenue for the property holder. When a property is vacant, it may also be used for personal purposes.

One of the most prominent uses of short-term rentals are tourists and businesspeople staying in Dubai for brief periods. Family vacationers also tend to gravitate toward short-term rentals since this allows them to stay in one place with the added benefits of privacy and personal space. Short-term rentals also tend to be more affordable for large groups than booking hotel room blocks.

While some investors might be tempted to discount smaller properties, this could be a significant missed opportunity. Smaller rental properties typically have lower rates for renters. However, this price difference may mean a more consistent volume of business since renters will prefer more affordable property. Additionally, purchase prices for these properties tend to be lower than larger properties and are frequently easier to obtain for this reason.

As with any real estate, location is of paramount importance to a solid short-term rental investment. Two key factors to keep in mind are the surrounding environment and access to amenities, such as shopping and recreation. Smart short-term rental investments are nearby or

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