Short-Term vs. Long-Term Rentals: An In Depth Comparison

  • January 24, 2025

Dubai’s thriving real estate market offers landlords multiple ways to maximize and customize their rental income. Whether you’re renting out a luxury apartment in Downtown Dubai or a villa in Arabian Ranches, the choice between short-term and long-term rentals plays a crucial role in profitability. Your decision should align with your financial goals and desired level of involvement—whether you seek the highest possible returns or a steady, hassle-free income.

Short-Term Rentals: High Flexibility, High Returns

Short-term rentals, also referred to as Holiday Homes or vacation homes, cater to tourists, business travelers, and individuals on temporary assignments. These properties are typically fully furnished and available for lease periods ranging from a few days to a few months. Platforms like Airbnb and Booking.com make it easy for landlords to connect with guests and secure bookings.

Characteristics:

  • Furnishing: Units are fully furnished.
  • Lease duration: days to a few months.
  • Target audience: Tourists, corporate travelers, and temporary residents.
  • Popular locations: Typically vacation hotspots like Palm Jumeirah or Dubai Marina, or business hubs like Business Bay.
  • Legal requirement: Dubai Tourism and Commerce Marketing (DTCM) permit.

Pros:

  • Higher rental income potential, especially during peak seasons.
  • Flexibility to adjust pricing and availability.
  • Ability to use the property personally when vacant.

Cons:

  • High maintenance needs due to constant tenant turnover.
  • Requires active management or a property manager.
  • Additional costs for utilities, furnishing, housekeeping, and tailored services.

Long-Term Rentals: Stability and Predictability

Long-term rentals appeal to families or professionals seeking stability. These leases typically last a year or more, offering landlords a consistent income stream with minimal involvement. Areas like Jumeirah Village Circle and The Greens attract tenants looking for long-term accommodation.

Characteristics:

  • Furnishing: Typically unfurnished but can be furnished.
  • Lease duration: 1 year or more
  • Target audience: Families and working professionals
  • Legal requirements: Governed by RERA and requires Ejari registration

Pros:

  • Stable, predictable income
  • Lower tenant turnover reduces management effort, giving a more hands-off experience
  • Tenants usually handle utility bills and minor maintenance

Cons:

  • Lower rental yields compared to short-term rentals
  • Limited flexibility in adjusting rental prices mid-lease
  • Longer vacancy periods if a tenant leaves unexpectedly

Which Option Is Right for You?

Your choice depends on your property’s location, management capacity, and financial goals:

  • Prime locations: Short-term rentals have higher success with occupancy in strategic locations
  • Management capacity: Are you looking for the mostly hands-off rental experience that long-term offers or a more involved approach like short-term rentals?
  • Financial Goals: Short-term promises higher earnings but with higher risk, while 

At Key One, we specialize in helping landlords navigate Dubai’s dynamic rental market in both the short-term and long-term capacity, offering Brokerage, Holiday Homes, Property Management, and Interior Design services. Not only will you experience a stress-free rental income, but you’ll also get to monitor your property’s performance through our seamless landlord app at any time! Whether you’re aiming for high seasonal returns or a steady income, our experts will guide you in making the most of your investment. Contact us today and take the first step toward enhancing your rental profits!

Written by: Samah ElBashir

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