Short term vs. long term leasing in Dubai

A real estate investment magnet, Dubai’s dynamic property market attracts local and foreign investors. Among the key considerations for property investors is the decision between short term and long term rentals in Dubai. Both strategies offer unique benefits and challenges, and the right choice often depends on the investor’s financial goals and risk tolerance, as well as the prevailing market conditions.

Understanding the nuances of rental yields, occupancy rates, and regulatory requirements is essential for maximising returns. Explore the key differences between long term and short term rentals in Dubai with haus & haus, so you can make informed decisions.

Understanding short term and long term leasing

What is short term leasing?

Short term rental investments involve leasing properties for brief durations, usually from a few days to several months. These rentals are regulated by Dubai’s Department of Economy and Tourism (DET), and properties must be registered and licensed accordingly.

Properties in popular locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah often command premium prices due to high tourist traffic. Platforms such as Airbnb and licensed holiday home operators facilitate these short term rentals in Dubai, making it easier for landlords to reach a global audience. Among our comprehensive short term leasing services are haus & haus holidays. Let our experts take care of everything for you, from professional furnishing and 24 hour guest support to professional photos, marketing, and financial projections.  

What is long term leasing?

Long term rentals in Dubai usually involve properties being leased for extended periods, with the typical lease length being one year or more. These leases must be registered through Dubai’s Ejari system, a government initiative that ensures legal protection for landlords and tenants.

Long term contracts offer stability with consistent rental income and reduced vacancy risks. Lower tenant turnover means minimal operational costs. Our long term leasing services are designed to make the process of renting your property for extended periods much simpler. With haus & haus property management services, we take care of advertising and marketing, move in and move out inspections, finding suitable tenants, handling admin work such as day to day tasks and rent collections, and ensuring compliance with regulations.  

The pros and cons of short term leasing for landlords

Advantages of short term rentals

• Higher rental income potential: A short term rental investment property usually yields higher income, especially during peak tourism seasons.
• Pricing flexibility: You can adjust pricing based on market demand, events, or peak seasons.
• Furnished units: Fully furnished properties command higher rental rates and attract premium paying tenants.

Additional short term leasing considerations

• Income volatility: Seasonal fluctuations and market conditions can result in inconsistent earnings.
• Operational costs: Higher maintenance, cleaning, and marketing expenses can reduce the overall profitability of a short term rental investment property.
• Regulatory requirements: Short term rentals require licensing and adherence to DET guidelines.

The pros and cons of long term leasing for landlords

Advantages of long term rentals

• Consistent income: Monthly rental payments offer a stable and predictable cash flow.
• Lower vacancy risk: Long term rentals in Dubai minimise the frequency of tenant turnover.
• Reduced costs: Properties offered for long term rentals usually have lower maintenance and furnishing costs compared to short term rentals.

Long term leasing considerations

• Limited flexibility: Rental prices remain fixed for the duration of the lease, which limits your opportunities to adjust your prices according to demand, season, or events.
• Long term commitments: Disputes with tenants or early lease terminations can lead to legal complexities.
• Administrative work: Ejari registration and adherence to tenancy laws add to the workload.

Key factors to consider when choosing a rental type

Location and demand in Dubai

Location is a critical factor that determines rental success in Dubai. Some areas tend to attract higher demand for short term stays due to proximity to attractions or business hubs, while others are more popular with long term tenants seeking space, value, and community infrastructure. Each property and location has unique strengths, so it’s important to assess what works best for your asset. Our team can help you understand demand trends and make data-driven recommendations for your investment.

Costs and financial considerations

Short term rentals in Dubai usually require landlords to fully furnish the property and take a more active role in managing guest turnover. Despite this, maintenance costs tend to be similar to those of long term leases—unless repairs exceed the typical AED 500 threshold. Like annual rentals, security deposits are also collected for short stays. While returns can vary, short term lets give landlords more flexibility to adjust pricing in line with market demand and seasonal trends.

Legal and regulatory requirements

To operate a short term rental in Dubai, you must register as a private owner and obtain a Holiday Homes permit from the DET through its online portal and ensure compliance with DET standards and regulations. You’ll need to submit documents, including the Emirates ID of the property owner or operating tenant, the title deed or lease agreement, NOC from the landlord if you’re subletting, a building permit (if applicable), and a commercial license copy for professional operators.

For long term rentals in Dubai, all rental contracts (renewals included) must be registered on the Ejari system. Landlords and tenants (or their representatives) can register online through the official Ejari website. You’ll need to submit various documents as part of your Ejari registration, including the original signed tenancy contract, the tenant’s Emirates ID and passport (non-GCC nationals), security deposit receipt, landlord’s passport, copy of the property’s title deed, a valid power of attorney document (if applicable), tenant’s UAE visa (non-GCC nationals), and a trade license (for commercial properties).  

You’ll also need to comply with RERA tenancy laws for landlords, including those governing rent increases, tenancy contracts, landlord responsibilities, dispute resolution, and termination of tenancy. As a landlord, you can either do all of this yourself or you can employ the services of our property management team here at haus & haus, who will take care of all this for you.