The short-duration arrangements are lucrative and flexible, allowing owners complete freedom of their assets
Short-term rentals are emerging as a major second income for UAE residents as they are high in demand and offer much higher returns. Industry executives say that many first-time property owners are listing their properties for short-term rentals to earn a second income.
Similar to other sectors, the short-term rental market also took a hit during the coronavirus pandemic in 2020 but recovered sharply on the back of ‘revenge travel’ witnessed after Covid-19.
Anna Skigin, founder and CEO of Frank Porter, an Airbnb Management Services company, said short-term rental has emerged as a major alternative income source for UAE nationals and expat property owners.
She added that short-term lets are lucrative and flexible – allowing owners complete freedom of their assets. “The short-term rental market provides on average 20 per cent higher returns than long-term – over a two to five-year basis,” Skigin told media in an interview.
“We are seeing property owners entering the Dubai real estate market for the first time and right away converting the units to short-term rentals. We are also seeing some of our clients sell their units to new buyers. It has become part of the selling point of a property,” said Skigin, a Russian and Canadian national.
Skigin added that short-term rentals always generate income. “We have this consistently with the majority of our owners who have been with us for over 2-3 years.”
Interestingly, many property buyers in the UAE, especially Dubai, who bought properties in the local market have listed their assets for short-term rentals on various online platforms to earn a second time to cash in on the rise in rentals.
In addition, industry insiders say that growing tourist numbers in Dubai and the UAE are also supporting the short-term rental market.
According to the latest figures released by Dubai’s Department of Economy and Tourism (DET), the emirate received more tourists than ever before in 2023, attracting 17.15 million international overnight visitors as compared to 14.36 million in the previous year, a massive growth of 19.4 per cent.
The numbers also surpassed the previous record of 16.73 million registered in 2019.
Skigin said that the highest-density areas are Dubai Marina, Jumeirah Beach Residence (JBR), Palm Jumeirah and Downtown. “These areas provide the highest rate per night. However, it doesn’t always mean these make the best returns because the property values are also high. Some of the highest returns (RoIs) are also in areas like Jumeirah Lake Towers (JLT), Jumeirah Village Circle (JVC) and soon to be Maydan.”
Laura Adams, sales director at Provident Real Estate, said the Dubai rental market recorded 205,346 new contracts and 293,624 renewals in 2023, with a notable rent increase across Dubai. This is attributed to the pandemic recovery and a strategic shift towards short-term leasing for higher returns.
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