Short-Term Lease in Dubai

Short Term Lease in Dubai from a Landlord’s Perspective – Short-term or Long-term?

Short-Term Lease in Dubai from a Landlord’s Perspective – Short-term or Long-term?

Dubai’s property market is renowned for its high-quality offerings and lucrative returns, attracting investors to consider short-term leases in prime locations like Dubai Marina and Downtown Dubai. With the city’s population expected to surge, the demand for diverse housing options, including apartments, studios, and villas for rent, will likely escalate.

Deciding between short-term and long-term leases is significant for landlords as short-term rentals cater to a broad audience, from tourists to business travelers seeking temporary stays. This article examines this pivotal choice from a landlord’s perspective, exploring the benefits and challenges associated with each leasing option in Dubai’s dynamic real estate market.

Benefits of Short-term Rentals

Landlords in Dubai have much to gain from short-term rentals, with benefits spanning financial, managerial, and market-related advantages. Here’s a closer look at the perks:

Higher Earnings Potential:

Short-term leases can command premium prices, especially during peak tourism seasons, leading to higher rental yields of 10-13% compared to 6-7.5% for long-term rentals. The dynamic pricing models allow for income optimization, potentially yielding higher returns than traditional leases.

Demand and Flexibility:

The tourism boom and the rise of remote working have increased the demand for short-term accommodations. This flexibility is a two-way street; landlords can adjust lease terms to capitalize on peak seasons and use their properties when needed.

Operational Advantages:

Short-term rentals often lead to shorter vacancy periods, fewer legal complications under DTCM regulations, and less frequent heavy maintenance. Landlords also have the upper hand in setting property usage rules, ensuring their investment remains in top condition.

Management and Promotion:

Specialized management services can aid in optimizing pricing, digital visibility, and providing concierge-grade hospitality, all of which contribute to a more lucrative and hassle-free rental experience. Additionally, online platforms offer a stage for property promotion, attracting a wider pool of potential tenants.

Market Position:

Properties in prime locations like Downtown Dubai, Palm Jumeirah, and Dubai Marina are particularly attractive for short-term rentals, offering landlords the opportunity to maximize their investment in these sought-after areas.

By understanding these benefits, landlords can make informed decisions about their leasing strategies in Dubai’s dynamic property market.

Challenges of Short-term Rentals

While short-term rentals can offer higher earnings potential, they also come with their own set of challenges that landlords in Dubai must navigate:

Regulatory Hurdles:

Navigating the stricter regulations, licensing, and taxation rules is a significant challenge for short-term rental providers. Even with the proper licenses from the Department of Tourism and Commerce Marketing (DTCM), landlords may still encounter cease-and-desist notices from owners association (OA) management companies.

Market Saturation:

The short-term rental market in Dubai is highly competitive due to a growing number of companies and individual licenses issued by the DTCM[18]. Additionally, the Revenue per Available Room (RevPar) has seen a decrease, attributed to an oversupply of hotel rooms and the regular opening of new hotels.

Operational Demands:

Maintaining a high-quality rental experience requires consistent attention to maintenance, cleanliness, guest interactions, and logistics. The operational demands, including managing bookings and property maintenance, can be overwhelming for landlords. Furthermore, during periods of lower occupancy, which can be influenced by seasonal trends, economic conditions, or unforeseen events, profitability can be adversely affected.

Landlords must also contend with restrictions from owners associations on the use of property facilities, such as gyms and pools, for short-term rental guests. The entry of big real estate developers like Emaar into the market can further challenge independent landlords by pushing out smaller companies and restricting access for employees.

To remain competitive, landlords must be well-informed about the latest regulations, licensing requirements, and tax obligations. While short-term rentals entail higher expenses and management costs, they can still provide better net yields for diligent investors who carefully manage cash flow and permissions. Despite minimal red tape on short-term furnished rentals outside of a few locale constraints, Dubai’s long-term tenancy rules can introduce more complexity.

Advantages of Long-term Rentals

Landlords in Dubai considering long-term rentals can expect several advantages that contribute to a more stable and predictable investment scenario:

Steady Income and Financial Predictability:

Long-term rentals provide a consistent income stream, with less variability in occupancy compared to short-term leases, ensuring financial stability for landlords. This steady flow of rental income offers predictability that can significantly aid in better financial planning.

Lower Operating and Turnover Costs:

With long-term tenants, landlords save on expenses associated with high turnover, such as cleaning, maintenance, and marketing for new tenants. This reduction in operational tasks not only saves money but also time, allowing landlords to focus on other aspects of property management or investments.

Tenant Relationships and Property Care:

Long-term tenants often treat the rental property as their own home, leading to better care and fewer damages. This can result in healthier landlord-tenant relationships, fewer disputes, and reduced repair expenses. Additionally, with tenants responsible for furnishing the property, landlords can save on the costs of providing and updating furniture and appliances.

These benefits, coupled with Dubai’s favorable real estate laws for long-term leases and a growing tenant preference for stability and security, make long-term rentals an appealing option for landlords seeking a more hands-off investment with reliable returns.

Read more: Short-Term Property Rentals

Making the Decision: Short-term vs Long-term

In making the decision between short-term and long-term leases, landlords in Dubai must weigh various factors that align with their investment goals and personal circumstances. Here are some key considerations:

Lease Duration and Target Market:

Short-term leases range from 1 to 6 months and cater to a transient clientele including tourists and business travelers.

Long-term leases typically extend from 1 to 10 years, attracting expat professionals and families seeking stability.

Financial Considerations:

Short-term rentals can yield higher returns (10-13%) but require active management and adherence to DTCM regulations, including obtaining a Holiday Home License and remitting Tourism Dirham tax.

Long-term rentals offer lower yields (6-7.5%) but provide a steady income with fewer operational demands.

Operational and Regulatory Factors:

Short-term rentals involve regular maintenance, dynamic pricing strategies, and tax considerations.

Long-term rentals typically have lower turnover costs and allow for a more hands-off management approach.

Landlords should evaluate these aspects in light of their own usage frequency, income goals, and desired involvement level. A mixed model approach may be optimal for some, capturing the benefits of both rental types. Ultimately, the choice should be based on personal circumstances, objectives, and the level of involvement desired.


As landlords in Dubai navigate the intricate landscape of property rental, the decision between short-term and long-term leasing remains deeply personal and strategic. The higher returns and flexibility of short-term leases often come at the cost of increased management responsibilities and regulatory compliance, while long-term leases offer more stability and lower operating costs.

This article has offered a comprehensive exploration of each option, weighing the benefits and challenges to aid landlords in making a well-informed decision that best suits their investment goals and lifestyles.

In the property market’s constantly evolving scenario, where both options have their merits, landlords are encouraged to reflect on their financial aspirations and the degree of involvement they desire in the management of their properties. For those who wish to delve deeper or require assistance in navigating the regulatory landscape of Dubai’s real estate market, expert advice is just a click away.

Feel empowered to make the most informed leasing decisions for your Dubai property portfolio, and don’t hesitate to seek further guidance to ensure your success. 


What defines a lease as short-term or long-term?

A lease is considered short-term if it lasts from three to six months, or operates on a month-to-month basis until the tenant moves out. On the other hand, a long-term lease extends beyond six months and can last up to 15 months before a new agreement is required.

How do lease durations vary and what is common?

Lease durations can be as brief as one day or as lengthy as 999 years. Typically, lease

terms are legally established for periods between 1 and 25 years, with many ranging from 1 to 3 years. In the modern business landscape, short-term commercial leases are favored for their flexibility, often resulting in shorter agreements.

Can you do short-term rentals in Dubai?

Yes, short-term rentals are permissible in Dubai, but they require permits from the Department of Tourism and Commerce Marketing (DTCM). This authority is responsible for promoting Dubai’s tourism industry and regulates all related activities, including short-term rentals offered by residents and homeowners. Landlords must obtain the necessary permit before leasing their property. 

What constitutes a long-term lease in Dubai?

In Dubai, a lease is classified as long-term if it is for a period exceeding 10 years and up to 99 years. Such leases must be registered in accordance with Dubai Law No.

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