Many of us are planning to escape the summer heat by hopping on a plane and going virtually anywhere cooler. And with the growing popularity of sites like AirBnB, some smart people have hoped to cover some of their holiday costs by renting out their Dubai pads while they’re out of town.
Dubai has high demand for short term rental accommodation and while the tourists are scarce during summer, the business execs continue to flow through. Many would prefer to stay in a home for their few weeks to few months’ stint instead of a hotel or serviced apartment. It’s a more authentic experience and you often get more for your money. These days more and more companies are implementing travel expenses policies that forbid hotel accommodation for extended stays.
Short term rentals have become popular in the UAE but it needs to be done correctly
Twelve month rental contracts are the norm in Dubai. But a property can achieve up to 50 per cent more when rented on a monthly basis; and considerably more on a weekly and daily basis.
Read: Top 5 Most Expensive AirBnBs In Dubai
Case in point; furnished one bedroom apartments in Cayan Tower Dubai Marina are currently advertised on propertyfinder.ae on a short term rental basis for Dhs15,000 per month; Dhs4,200 per week and Dhs700 per day. Similar unfurnished apartments rent for Dhs120,000 per year.
Garden Home villas on the Palm Jumeriah which rent for Dhs350,000 – Dhs850,000 per year; are available on a short term basis for Dhs20,000 – Dhs50,000 per week and Dhs60,000 – Dhs150,000 per month. If you’re lucky enough to call one of these villas home; it’s tempting to cash in.
Read: Thinking Of Putting Your Home On AirBnB? Think Again
But before you get carried away, please note that privately renting out your grand or humble abode or sub-renting without the proper permissions is strictly illegal in Dubai.
Before putting your property on the market, make sure you are complying with the laws or face a Dhs100,000 fine
If you’re a tenant, first you need a no objection certificate from your landlord to sublet. And whether you’re a tenant or an owner you need to comply with Dubai’s Department of Tourism Commerce Marketing (DTCM) regulations and obtain the appropriate license and permissions.
Read: Dubai Tenants Can Lease Thier Rented Homes
The DTCM issued a timely stern warning earlier this month outlining hefty fines of up to Dhs100,000 for those found in breach.
According to DTCM the regulations are about improving transparency and protecting prospective short term tenants from fraudsters and unprofessional and unlicensed operators. The cynics among you could view the timing of this announcement as a deliberate scare tactic to reduce competition to hotel operators who are staring down a particular tough summer of low occupancy levels and/or to generate fee revenues. Semantics perhaps but for most of us contemplating renting out our places during summer, licensing requirements, fees and the threat of fines will likely push the idea quickly into the too hard basket. It needn’t be.
The solution lies in listing your property and engaging the services of a licensed short term professional who can take care of everything from go to woe.
Read: Know Your Legal Rights In The UAE
Getting A Short Term Agent To Help
Getting a short term agent to help you is advised but it is costly. Short term specialists typically charge 20 per cent to 30 per cent of the bookings made as opposed to the three per cent – five per cent charged to manage a property leased on an annual basis. While that might seem a lot, the work involved is considerable. A full service includes advertising, booking, accounting, inventories, housekeeping, maintenance, check-ins, check-outs, handling customer complaints, linen and towel change, handling additional customer requirements, maintenance issues, registering every guest passport with DTCM, providing welcome packs to the guests, and much more.
All things you probably don’t want to handle yourself. Be wary of those offering lower management fees. They are unlikely to include all of the above and all that you and your short term tenant need. And despite the largish management fees, more and more landlords in Dubai are opting to furnish their investment properties and offer them for short term rental. Proponents claim the net income is higher for short term, but much depends on the competency of the management company. A good one will have it occupied 75 per cent of the year.
Read: Property Law In The UAE – What You Need To Know
It is important to note that not all real estate companies have the appropriate license nor the expertise to offer a short term service. The vast majority of agents advertising property for rent in Dubai are purely leasing agents that do not provide ongoing property management. Those specialising in short term are even fewer. Anything less than a six month lease is considered short term and requires a separate DTCM license.
On propertyfinder.ae we only allow appropriately licensed operators to list properties for rent on a monthly, weekly and daily basis. Many of those you’ll find elsewhere, may technically be illegal. So be please careful and enjoy your summer.
Images: Getty
