Here is everything you need to know about short-term lease in the UAE
Short-term rentals are increasingly growing popular in the UAE, wherein landlords and property managers can consider leasing their units for a few days or a couple of months and not bind them into a long-term rental contract. Reem Al Khatib, Dubai managing director at GuestReady Dubai, says short-term rental properties are often furnished, offered with amenities and services and rented out for less than a year. “Our properties are usually rented from one night to several weeks or months,” says Al Khatib. “These properties require a permit from the Department of Tourism and Commerce Marketing [DTCM].”
For guests, short-term rental means that they can experience a city like a local and stay in an apartment with more space and amenities than a traditional hotel room, says Al Khatib. “The benefits for landlords is that they get good yearly returns and hassle-free property management services such as furnishing, maintenance, marketing and housekeeping by a professional company/operator.”
Fadi Nwilati, CEO of Kaizen Asset Management Services, notes a massive growth in the Dubai’s short-term rental market in the past year. “We have seen some short-term rentals with 25-40 per cent more earning potential than long-term rentals,” says Nwilati.
“Dubai will always be a tourist hub, and with Expo 2020 on the horizon, we will only see an increase for short-term rentals, specifically properties situated in prime areas. If you list your home with short-term rental agencies, you are guaranteed rental at a higher yield since these agencies take care of guest and property management.”
Is it only for tourists?
There is also demand from residents, says Anna Skigin, founder and CEO of Frank Porter and Frank Porter Designs. “For example, we have residents booking for one or two months while they are moving to another emirate or perhaps looking for a more permanent place,” says Skigin.
Do I go through a hotel operator, developer or holiday-home operator?
When the property is within a hotel apartment building, then it makes sense to have the hotel operator manage the property, says Nwilati. Dubai also has some great holiday home operators. It depends on the kind of returns offered, and track record within a building or location.
What it means for a landlord
Rakesh Mirchandani, director of KGR Real Estate, says landlords gain on flexibility and good returns on investment. “The landlords can decide or choose when their property can be available for rent. They have the freedom to use the property for personal use.” Landlords can also organise regular visits to check the property.
“Also, with a short-term lease there is less paperwork and the contracts do not need to be registered with Ejari, which is mandatory and applicable only for long-term lease contracts,” says Mirchandani.
The returns often depend on the location or address of the property. “Usually, the demand is higher in more central, prime or beach areas, or those close to a shopping mall or any entertainment or touristic attraction,” he adds.
Are these rentals furnished and self-catering?
Mirchandani says short leases are self-catering rentals and are usually furnished apartments. “The obvious point to remember is that the more a landlord will provide, the higher the returns will be.”
“The landlord will have to invest in the furniture, contents and provide the apartment in a fully furnished condition. In addition, there is the cost of the utilities, insurance, commissions or fees, and of course, the maintenance and cleaning fees. The property will need to be kept in ideal condition to attract new tenants,” says Mirchandani.
Published: April 30, 2019 19:58
Hina Navin Special to Property Weekly