Short-term rental contracts: The way to go in Dubai?

Dubai thrives on its strong tourism sector and a robust real estate industry to keep its economy rolling.
With the local property market gaining momentum at the start of the ongoing year, Dubai has reappeared strong on the radar of international real estate investors.
As has been the case with Dubai in the past, the emirate is more than just a blip on the global economic radar.
This change has once again been inspired by Dubai government’s support for renting apartments to visitors and tourists on short-term basis.
This move is expected to guarantee a win-win situation for both the landlords and temporary tenants.
According to the policy introduced by Dubai government, any person who owns residential houses and apartments in the port city can rent out their property as holiday homes on a daily, monthly or annual basis.
This setup does not require an Ejari-regulated tenancy contract but it is necessary to seek the services of a licensed operator who is authorized by Dubai’s Department of Tourism and Commerce Marketing (DTCM).
These operators are responsible for finding potential renters for your apartment during holiday season.
With this, people can now enjoy a comfortable living experience in Dubai for a reasonable short-term rental contract.
According to Reidin Data, apartment and villa rental yields in the emirate have increased around 10 percent and 7 percent respectively in a year-on-year comparison.
This is good news for apartment owners interested in getting better rental yields on their vacant properties.
Presently the demand for short-term rentals is peaking in Dubai, especially in the corporate and leisure segments, owing largely to an inflow of investment into the real estate and tourism industries along with the highly anticipated Expo 2020.

Laws Regulating Short-Term Rental Apartment Deals

Decree No 41 of 2013 was introduced specifically to regulate the short-term or holiday rental market in Dubai.
The law states that residential properties which are to be used as holiday homes will be handled exclusively by licensed operators only.
The reason why Dubai government encourages this short-term apartment renting system is because it is working to ensure simple classification and grading of housing units.
Additionally, the government is also interested in maintaining a certain standard in the rental housing market which also include cleanliness, services, health and building safety.
But the most important reason for Dubai government’s decision to support the short-term apartment rental market is the fast approaching Expo 2020.
The emirate will need a lot more residential space to accommodate a large number of visitors who will land in the emirate for the mega event in a few years.

Comfortable Living at Attractive Prices

The renting culture in Dubai is presently more inclined toward twelve month contracts. But this doesn’t mean that properties rented on short-term basis are not profitable.
Apartments rented out on a monthly, weekly or even on a daily basis can generate handsome revenues for landlords during holiday season.
Visitors interested in renting out an apartment in the emirate should know that some of the most comfortable apartments in Dubai are located at posh locations of the emirate.
Among these, Dubai Marina, Downtown Dubai and Business Bay are worth mentioning and short-term rental apartments here can be secured at a good price depending on the time period of your stay.
According to the latest report published by UAE-based property portal Bayut.com, the average annual rent for an apartment in Dubai Marina cost around AED144,000.
The annual average rent for apartments in Business Bay meanwhile cost AED129,000, while average rent for apartments in Downtown Dubai cost around AED171,000.
These price tags come with the promise of luxurious and comfortable living experience for visitors looking for a taste of the good life.
But if you happen to be a long-time visitor and are looking to rent spaces for less than a year, short-term rental contracts are what you should be looking at.
The shorter contracts benefits both sides. Landlords get to earn more through shorter rental contracts than through annual leases, while tenants enjoy the flexibility of paying for the exact period of time they wish to utilize the premises.
As the Expo 2020 draws near, Dubai is expecting to receive 25 million tourists for the event who cannot be simply accommodated in existing and upcoming hotels.
Under such circumstances, short-term apartment rental contracts will certainly prove a profitable option for both landlords and lessors.