Are Dubai holiday rentals still a lucrative investment?

Our Director of Short Term Leasing, Emma Campbell, spoke to Property Finder about Dubai’s holiday rental sector and why many landlords still choose it over other investment choices. Here’s what she said in the article.

There are many key factors that attract buyers and landlords to the emirate – stunning architecture, an opulent lifestyle, world-class attractions, year-round sun, and reassuring levels of public safety, to name a few.  

Dubai's tourism sector is another plus, remaining robust throughout the year (perhaps with a dip in July and August) and ensuring a steady influx of visitors seeking short term stays.

You also have the continuous stream of expats relocating to Dubai, creating a consistent demand for temporary housing options, further boosting the appeal of short-term rentals.

What’s more, compared to global cities like New York, London, Singapore, or Hong Kong, Dubai delivers exceptional value for money and quality in the short term rental market.  

So, are holiday homes as profitable as people say? 

Unparalleled flexibility

Landlords love short-term rentals because they offer flexibility. Unlike long-term leases, short-term rentals allow owners to use their property themselves or host family and friends. Plus, property management companies can handle maintenance and guest services.

Great ROI and more freedom

Short term rental properties in tourist hotspots often yield around 10-20% more revenue compared to traditional long-term leases. 

In the future we expect to see a balanced existence between the short-term and long-term rental segments, each catering to distinct needs and preferences in the city. The key for landlords lies in understanding the sector overall and making decisions based on their investment strategies and individual needs.

Strong appreciation potential

Dubai real estate generally has a history of appreciating over time, with property values consistently rising. Given the demand for holiday homes here, coupled with their location and condition, they can potentially appreciate at even higher rates, resulting in a greater potential resale value. 

Location is key

In terms of the best locations for holiday rentals, these are just a few that continue to catch investors’ attention. 

• Dubai Marina: This glamorous area has a beautiful waterfront setting with yachts, a promenade, and easy access to attractions
• Downtown Dubai: This central location is home to famous landmarks like the Burj Khalifa and Dubai Mall
• Palm Jumeirah: This luxurious, man-made island offers beachfront properties with stunning views and upscale amenities
• Jumeirah Beach Residence (JBR): This lively beachfront community has endless restaurants, shops, luxury hotels, and stylish apartments

The best is yet to come

The upcoming new Al Maktoum airport is another factor that will boost Dubai's holiday rental market in the future. This massive new terminal will have a capacity of 260 million passengers annually, bringing even more tourists to Dubai. Not to mention the hundreds of developments underway including resort-style residences, new beachfront destinations, and an ever-expanding variety of entertainment hubs.  

Long story short, holiday rentals remain a highly sought after investment choice, and for good reason. Still got some questions? We’re here to help. Get in touch with us to get started.