Guide
Short-term or long-term rental in Dubai: how to choose
By Reem Al Khatib, founder, Yield Properties (RERA ORN 48756) ·
Short-term (holiday home) rental can bring in more gross income than a yearly lease. It also costs more to run, swings with the seasons and takes more work. Whether it actually earns more depends on the unit, the building and how well it's run, not on the headline nightly rate.
I've been setting up and running holiday homes in Dubai since 2018, with over 500 under management at one point, so this is the comparison I've run more times than I can count.
Side by side
Income
- Long-term (annual lease)
- Fixed annual rent, often paid in 1 to 4 cheques
- Short-term (holiday home)
- Varies by month. Winter is strong, summer is weaker
Furnishing
- Long-term (annual lease)
- Optional (unfurnished is common)
- Short-term (holiday home)
- Fully furnished and equipped to hotel standard
Utilities and internet
- Long-term (annual lease)
- Paid by the tenant
- Short-term (holiday home)
- Paid by you
Running costs
- Long-term (annual lease)
- Service charge, maintenance, about 5% management
- Short-term (holiday home)
- Service charge, cleaning, linen, restocking, utilities, plus an operator fee, usually a share of the revenue
Licensing
- Long-term (annual lease)
- Ejari registration
- Short-term (holiday home)
- DET holiday home permit for each unit, plus a building or developer NOC where required
Guest taxes
- Long-term (annual lease)
- None
- Short-term (holiday home)
- Tourism Dirham of AED 10 to 15 per occupied bedroom per night, collected and paid to DET monthly
Your time
- Long-term (annual lease)
- Low
- Short-term (holiday home)
- High, unless an operator runs it
Flexibility
- Long-term (annual lease)
- Tenant protected by law. Getting the unit back for your own use or a sale needs 12 months' notarised notice
- Short-term (holiday home)
- You can block dates for yourself or prepare for a sale
| Long-term (annual lease) | Short-term (holiday home) | |
|---|---|---|
| Income | Fixed annual rent, often paid in 1 to 4 cheques | Varies by month. Winter is strong, summer is weaker |
| Furnishing | Optional (unfurnished is common) | Fully furnished and equipped to hotel standard |
| Utilities and internet | Paid by the tenant | Paid by you |
| Running costs | Service charge, maintenance, about 5% management | Service charge, cleaning, linen, restocking, utilities, plus an operator fee, usually a share of the revenue |
| Licensing | Ejari registration | DET holiday home permit for each unit, plus a building or developer NOC where required |
| Guest taxes | None | Tourism Dirham of AED 10 to 15 per occupied bedroom per night, collected and paid to DET monthly |
| Your time | Low | High, unless an operator runs it |
| Flexibility | Tenant protected by law. Getting the unit back for your own use or a sale needs 12 months' notarised notice | You can block dates for yourself or prepare for a sale |
When short-term usually makes sense
- The building allows holiday homes and has strong tourist demand (beach, Marina, Downtown, near major venues).
- The unit photographs well and is easy to reach.
- You're fine with income that changes month to month.
- You want to use the property yourself for part of the year.
When long-term usually makes sense
- You want predictable income with little involvement.
- The building bans or restricts holiday homes, or has weak tourist demand.
- The service charge is high. Short-term costs come on top of it, and the extra income has to cover both.
How to compare them properly
Compare net income, not gross. For short-term, take a realistic full-year occupancy, not peak season, then subtract the operator fee, cleaning, utilities, furnishing spread over its lifespan and the Tourism Dirham. Then set that against a long-term lease after its own costs. If short-term only wins by a little, the extra work and risk usually aren't worth it.
We can run both scenarios for a specific unit. Get in touch.