Posted inOpinion

Why summer is the perfect time to rent out your luxury Dubai home for short-term rentals?

The luxurious short-term rental market offers a remarkable 20 per cent higher return compared to traditional long-term rentals over the span of two to five years

Why now is the perfect time to rent out your luxury Dubai home for short-term rental?

As numerous Dubai residents embark on extended summer getaways, their lavish homes sit unattended, presenting a lucrative opportunity to generate additional income by transforming them into short-term rentals. Hence, we elucidate why there has never been a better time to consider opening up your home as a short-term let. 

The short-term market is stronger than ever

In light of a flourishing tourism sector and solid governmental support, Dubai’s short-term rental market has witnessed a remarkable surge in recent years with no indication of abating. As indicated by a report from AirDNA, the city currently boasts an impressive 20,474 active listings, representing a substantial 33 per cent increase from the previous year. Such is the strength of this market that we are observing a trend of new property owners entering Dubai’s real estate arena and promptly transitioning their properties into lucrative short-term rentals.

You can expect a healthy ROI

The luxurious short-term rental market offers a remarkable 20 per cent higher return compared to traditional long-term rentals over the span of two to five years. With an average annual revenue of $33,215 (AED 122,000), this industry has seen a remarkable 21 per cent increase in the past year alone. According to AirDNA, the current average daily rate (ADR) stands at $227 (AED 836) per night.

Among the opulent areas that promise the greatest return on investment are Dubai Marina, JBR, Downtown, and Palm Jumeirah. These prestigious destinations continue to attract discerning guests and command the highest rates per night. However, it is in the exclusive locales of Jumeirah Lakes Towers and Jumeirah Village Circle where property owners can unlock unparalleled returns on their investments, as property values remain enticingly lower.

You might think Dubai slows down over the summer, but think again!

From January to April 2024, Dubai saw a staggering influx of 6.68 million overnight visitors, marking an impressive 11 per cent increase from the previous year. The efforts invested by Dubai Tourism to position the city as a premier year-round destination have certainly paid off, dispelling any notion of the UAE summers being desolate.

Dubai Tourism (DET) also invested considerable time and effort in promoting Dubai as a year-round destination, debunking the myth of UAE summers being deserted. DET’s recent article ‘99 things to do this summer in Dubai’ showcases a diverse range of indoor attractions such as the Museum of the Future and Motiongate at Dubai Parks and Resorts, along with recommendations for watching sunrises and getting Vitamin D in the morning.

The article also highlights the best dining, shopping, and spa experiences in the city, demonstrating the wide array of activities available for visitors to enjoy. Hence, Dubai continues to attract numerous visitors thanks to its endless opportunities for exploration and leisure.

It’s a fully regulated and easy-to-follow process

Since 2016, short-term lets in Dubai have been fully regulated, leading to the emergence of the Airbnb market as a profitable income source for UAE nationals and expat property owners. It is advisable to seek guidance from an expert when setting up, as there are specific Department of Economy and Tourism (DET) regulations to follow and fees to be paid.

However, the process is straightforward and can be completed independently by following the instructions on the website. Obtaining DET certification ensures that your property meets the necessary technical specifications and legal requirements for short-term rentals.

People are choosing short-term rentals over hotels

Eager travellers to Dubai seek to bask in the opulent lifestyle that the city is renowned for, willing to invest generously for an unparalleled experience. The demand for exquisite penthouses and lavish villas is surging, delivering substantial profits to astute property owners venturing into the realm of short-term rentals.

For tourists with the budget to facilitate staying in a self-catering option, it’s a no-brainer as they can enjoy the same spectacular views of Burj Khalifa or Dubai Marina as they would in one of the surrounding hotels, but in the comfort of a lavish penthouse apartment, with home-from-home comforts and amenities on the doorstep or just a click away on an app. 

Overall, now is the ideal time to explore the option of renting out your home as a short-term rental, especially during the summer season when there is a significant increase in tourism. With a fully regulated process in place, along with a healthy return on investment, venturing into this market can be a lucrative opportunity if you are travelling abroad.