As Dubai continues to see a surge in leisure and business travel, the opportunities for returns on short-term rentals grows, too. The strong emergence of holiday homes can no longer be viewed as a trend, but rather a tested, tried and proven way to see higher returns on your property.
In general, the prerequisites are just right to sustain the power of holiday homes in the Emirate. Dubai’s safety, ease of travel restrictions, stance as a commercial, retail and tourism hub all come together very nicely to attract sustained occupancy rates. Rates that are set to soar higher as Expo 2022 approaches this week. Even in the face of a challenging year that passed, holiday homes were still able to cater to and profit from staycations and their use as accommodations. In fact, the only city to register a positive spike when international tourism declined by 74% was Dubai.
By February 2021, short-term rentals made up 20% of inventory with 25,910 rooms available at an average occupancy of 75% (deluxe) and 84% (standard). Both types of short leases recorded higher occupancy rates than hotel establishments ranging from 1-star to 5-star. Figures that indicate demand, and room for more investors to capitalize on this type of offering to meet the demand.
(Dubai Tourism figures as featured in Gulf News: https://bit.ly/3zLc6Sl)
Now, as a property owner, imagine the potential of your short-term lease property situated in a great location to host residents, guests and business travelers. Here is a break-down of key points to help in your consideration:
Returns
Figures indicate that you can expect higher returns for short-term leases in comparison to long-term contracts. Why? You have the control to adjust the price of your property according to demand and the season.
In comparison, long-term leases are set by the contract, and any adjustments made each year are governed by the RERA index and capped at a certain percentage, regardless of gross changes in the market price. With rents soaring in the double digit percentages, landlords are faced with a conundrum with regards to what to do with their long-standing tenants holding rental contracts set significantly lower than current market trends.
Flexibility
When you own a holiday home, you have the option of using the property yourself as a guest for an agreed period. As the property is not tied to one tenant for an extended period of time. In order to remove a long-term lease tenant, the standard is a 1-year official notice.
Resale
A holiday home can be sold as is, or for end use. As there is no long-term tenant, viewings can be scheduled with more ease, and a property will be vacant on transfer. Likewise, you can continue to profit on your property until the point of sale, and there is no need to make considerations for a tenant that has leased the property for the long-term.
Ease
Your asset, completely managed by a dedicated property manager, for your maximum benefit, profit and ease. Services under that scope include check in/out, professional photos, online advertising, cleaning and maintenance, furnishing services, short-stay license, guest background check, monthly pay-outs and overviews, price optimization with daily pricing, and more. Owning a holiday home can be as simple as a contract made on a property you own, and can be as hands-off as you desire.
In response to the growing demand for this investment type, we have partnered with an airbnb superhost to facilitate the transformation of your property into a holiday home. Additionally, as a brokerage, we will better be able to secure properties in prime locations and destinations to capitalize on this option, to ensure high occupancy rates for you as an investor. Likewise, we can also manage the sale of your holiday home should you choose to do so at any time.
Holiday homes are one of the best ways to invest in Dubai’s property market, today.
Are you ready to capitalize on this opportunity?