August 24, 2024
Short term rentals or leasing are generally known as holiday homes or properties rented for vacations. People generally consider it as a side investment by renting their property for a shorter period of time and generate high passive income. Dubai is known for its marvellous landmarks and attracts tourists from all around the World. The Expo 2020 is one of the primary drivers for tourist flow. However, this is not the only reason because the real estate in Dubai has surpassed many levels in providing luxury living and glamour. Many business individuals and celebrities consider Dubai as a travel destination. Therefore, the government in Dubai has improved its ability in providing the best leasing options for properties in Dubai.
In the last couple of years, holiday homes have become immensely popular according to the industry executives. Most people intend to travel at least once a year either for business or leisure purposes which is why the short term rentals industry has skyrocketed in Dubai. Locals also tend to opt for short term rentals during the holiday time. Dubai offers a plethora of options in its wide range of neighbourhood’s desire for green and sandy views to people. The general consensus is that Dubai is the most developed city in the United Arab Emirates and has everything for everyone. This article focuses on the benefits of short-term leasing in Dubai and the knowledge surrounding it.
Defining Short Term Rentals
In Dubai, fully furnished apartments, vacation rentals, and hotel apartments are typically offered for short-term rental. Vacation homes, which come with utility bills and parking spaces, are growing in popularity just like hotel apartments. There are typically weekly and monthly options for short-term rentals. These are primarily for visitors and business travellers who are looking for a cosy place to stay after a long day of sight-seeing or business. Landlords and renters are equally benefited by these property rentals, some advantages and disadvantages are discussed for detailed understanding for short term lease.
Pros and Cons for the Owner/Landlords
Pros
Higher Rental Income
When it comes to rental income, short-term rentals in Dubai are more profitable for owners than long-term rentals. Although cash flow can fluctuate, annual revenue from short-term rentals is higher. Short-term rentals also tend to command higher prices during peak tourist seasons and events, allowing owners to charge higher rates.
Flexibility
In addition to giving property owners more flexibility to modify pricing strategies based on market conditions, occupancy rates, and special occasions, short-term rentals also allow owners to block off dates on which they would like to use the space for personal purposes.
Connecting with Travellers
Landlords are able to exchange ideas, tales, and points of view when they host visitors from various cultures and nations. Making relationships with foreign visitors can also increase the network, encourage positive word-of-mouth referrals, and increase the number of reservations.
More Control
Finding a tenant won't cause the house to be empty if landlords want to take a vacation. In addition, they will get to earn some money and have someone take care of the house. When tenants stay for a few days, weeks, or months, the property owner has more control over the upkeep of the rental.
Cons
Risk of Damage
The likelihood of property damage can rise because of the increased guest turnover. There can be frequent wear and tear on the property as short-term tenants sometimes may not intend to take the same care as long-term occupants.
Maintenance Cost
These properties are more like hotels than rental homes because maintenance costs can range from replacing furniture to replacing linens and toiletries; Also the deposit cannot always cover these costs, and tenants not always be happy with the décor choice; as a result, owners may need to regularly upgrade the house to make it appealing to guests when renting it out for a short period of time. If the tenant damages any furniture or an appliance, it would be unattractive to the next tenant.
Inconsistent Cash Flow
Owners of short-term rentals should be aware that no two months are the same and that the peak season will depend on where your property is located. As a result, it is impossible to predict a monthly rental income from short-term rentals, even though they can command higher rates per night. However, the occupancy rate is frequently lower.
Dealing with Difficult Guests
Short-term renters occasionally can fail to be considerate of the property or the neighbourhood and can have different expectations. As an owner, addressing complaints, noise disruptions, and other issues can be a stressful and time-consuming task.
Pros and Cons for the Renters
Pros
Flexibility
When moving for a job, vacation or just a better flat down the street, some tenants prefer shorter-term leases because they offer more flexibility. A short-term rental, for instance, enables you to investigate employment prospects outside of your typical commute radius if you're hiring. An assignment that requires to relocate temporarily to a different city can be fulfilled with the flexibility that a short-term rental offers.
Cost-Effective
In terms of finances, short-term rentals are more affordable than standard lease agreements. Tenants are freed from large upfront expenditures like large security deposits and agency fees that come with long-term leases.
A Whole Package
One of the main advantages is the well-equipped kitchen in short term rentals which allows one to save money on dining out while visiting. Most of the time the short term rentals come along with hotel quality features such as regular housekeeping, concierge services, and access to shared spaces like gyms and pools.
Cons
Hidden Cost
It can be assumed that short term rentals are more affordable at first but usually extra costs linked to them can add up in the total budget. Tenants must be well aware of these expenditures like booking fees, security deposits and cleaning fees and many others.
Stricter Rules
As compared to regular leases, rules and regulations governing short-term rentals are frequently more stringent. Renters can have restrictions on the quantity of guests they can entertain, the volume of noise they can make, and their access to common areas. Tenants' personal space and adaptability within their rental property can be restricted by these rules.
Protection of Tenants Rights
Short-term rentals are governed by a different legal system with fewer tenant protections than long-term rentals, which are protected by extensive tenancy laws. Upon renewing the stay, the owner can raise the rent, leaving the tenants open to abuse.
Landlords can now enjoy a hassle-free process that includes all the necessities of getting the property the exposure it needs, such as marketing, photography, interior design services, and more, with end-to-end property management services in Dubai. The majority of visitors and expats like their vacations to have a cosy feel. Considering they are less complicated to use than hotel apartments, flexible furnished apartments for rent have become a popular option in the city. After 2022, the era of short term rentals has created a hype in Dubai and is gaining much focus because of its extra advantageous outcomes. Short term rentals are now being labelled as homes away from homes because it gives the feel and comfort of having your own place.
