If you are a property owner who frequently travels outside of Dubai on business trips and the sort, or an investor in ownership of multiple properties, you can transform your property into a consistent income stream by renting it out on a short term rental. However, before you can legally rent out your property in Dubai, you must first qualify as a licensed operator under Decree No 41 of 2013. The decree, which is designed to regulate the holiday or short-term rental market, requires property owners interested in renting out their property to register as licensed operators.
This allows the authorities to properly classify and grade the properties, while simultaneously ensuring the quality of the listed rentals across the entire market. At the same time, interested property owners must determine which rental agreement works for them – short term rentals or yearly rental contracts. In this blog, we will try to uncover the benefits of each agreement to help you decide which one works best for you.
Advantages of a short term rental agreement
One of advantages of short term contracts is flexibility. The shorter rental periods allow property owners to adjust their rental rates according to the movement of the local market. If prices go up, you can adjust your rental rates to avoid operating at a loss. If prices drop around your area, then you can easily keep in the mix by lowering your rates at a competitive rate. This rental agreement is perfect for areas that are in high demand, where there is no shortage of potential tenants despite increases in rent over the years. If you are putting your property up for sale, this rental setup also allows you to continue letting the property until a buyer purchases it. A short notice to the tenant is all that is required for a smooth transition.
Short term rentals are ideal for owners who do not mind delving in intensive property management and marketing. Due to the quicker turnover periods in short term contracts, there is bound to be more work involved, such as the processing of the tenancy contract and the physical inspection of the property. And if you prefer personally checking the state of your properties on a regular basis, then this agreement works for you.
Advantages of an annual rental agreement
Annual contracts, on the other hand, assure owners a consistent flow of income throughout the entire year. Long turnover periods mean less effort and time will be needed to market the property for rent. Consequently, owners will only have to prepare the property for new renters once a year, if the old tenants choose not to renew. Utility costs can also be attributed to the tenant, which means you no longer have to worry about making sure the monthly bills are paid on time.
If you do not have a lot of time to spare for managing your property, this type of agreement will best fit into your current scheme.
With a recent update in regulations, private home owners and tenants in Dubai can now lease their properties on a short-term basis. If you are interested, you can partner with PK Holidays to get your property listed for rent. With our industry experience and expertise, we can properly manage your investments and ensure your property gets marketed through the optimal channels. List your property with us today and get maximum return on your investment.