If you’re planning on getting out of town this summer, renting out your home while you’re away can be a quick way to earn additional income. Residential rentals in Dubai might not be performing as well as in past years, but vacation rentals across the city are thriving, and are 20-40 per cent higher than long-term rent over the year, say experts. Current occupancy levels until September is good, says Anna Skigin, CEO of Frank Porter, as international flight prices to Dubai decrease. “So for a one-bedroom unit on a vacation rental scheme you can look at Dh250-Dh300 per night, while for a three-bedroom unit it is Dh600-Dh750 a night,” says Skigin.
Gregory Lewis, managing director of Airdxb Dubai, says many homeowners and tenants resort to short-term rental to help to pay the rent or mortgage, or just to earn extra money.
50%The premium of short-term lets over traditional rental properties
While it’s a quieter time of the year, summer in Dubai still has a strong footfall of tourists capitalising on cheap travel fares as well as business professionals looking for quality accommodation. Such travellers like the diversity of staying in a home which gives creature comforts as well as a chance to experience what it’s like to be “a local”. “Dubai updated their regulations in 2016 that made short/holiday letting for homeowners and tenants alike an easier process,” says Lewis. “By applying for a license online, understanding the regulations, paying the necessary fees and making sure your apartment is equipped at the level stipulated by the Dubai Tourism Commerce and Marketing Depart [DTCM], you are good to go.”
He says that it is always better to plan ahead and advertise the property once you have registered your home with the local authorities. “As there are less visitors over this time of year, you want to secure those guests as soon as possible to get the best rates. But if you wish to do this at short notice, guests will be found, but expect to drop the nightly rate to entice them to your home over others.”
70%The proportion of guests who book after viewing only pictures of the house
So, how to attract these guests? Skigin feels that online platforms, such as Airbnb, are the best way you can market a home for vacation rentals. “Such platforms give you access to tourists from around the world who are looking for an apartment to rent when they come to Dubai. If you’re organised, you can list the same property on different booking sites, giving your apartment maximum exposure,” she says.
Beautify the property
Putting in some effort to make the house look beautiful and inviting is also part of closing a deal. “Remember, you are appealing to the world, all nationalities from different backgrounds. Offering a home that is decluttered and neutral in taste is the best option,” explains Lewis. “Make sure you remove and secure your personal possessions and leave available to the guest what you don’t mind them using. Giving extra touches always helps, which can include welcome baskets, additional cleans during their stay, as well as spare towels and linens. The more you can offer the better chance you have of receiving more bookings. Photographs are a huge marketing tool. As the age-old saying goes, ‘a picture speaks a thousand words’, and it couldn’t be truer for this concept. Our latest statistics show approximately 70 per cent of guests book viewing only the pictures and not reading the descriptions. However, factual descriptions and helpful tips, including local transport guides, restaurants and tourist attractions, are necessary.”
Dh300The higher end of the nightly rental of a one-bedroom unit in Dubai
Compared to standard long-term rentals, experts say short-term lets generate up to 50 per cent more income and you can adjust the price based on the season or events that increase demand for property, so you can take advantage of such opportunities. For example, when Expo 2020 hits, apartments are expected to be in high demand!
Also, Skigin feels traditional rentals can cause challenges when collecting payment, which online platforms can overcome. “When you rent out your apartment as a short-term vacation unit, the booking platform takes payment from guests before they check in! That means you’ll receive payment when the guest checks out. And platforms like Airbnb also provide homeowner protection, helping to protect the value in your home, while you increase the balance in your bank account.”
Maximise asset value
Nakul Sharma, founder and CEO of Hostmaker, which manages homes for short and mid-term rentals, says vacation homes are now a new category in travel accommodation. “Many homeowners now prefer to give us the responsibility of managing their homes and we put it up as a vacation rental, giving a peace of mind to the homeowner as well as taking care of all traveler needs,” says Sharma, who plans to start operations in Dubai in September.
Fundamentally our relation with our homes is changing, says Sharma. “Earlier homes were private spaces. Now as homeowners are becoming well-travelled and tech savvy, they are delaying putting down their roots, and are thinking of the home as an asset that could make some money. It’s like maximising the value of their asset. We are seeing that homeowners are willing to pay a premium for a professionally managed, well-curated home.”
Holiday homes in Dubai are found at a wide range of prices ranging from the simple to the luxurious, offering something for every type of traveler, such as full-sized appliances, dishes, books, laundry facilities, swimming pools, state-of-the-art gyms and beautiful balconies.
“These kinds of amenities can make any stay so much more comfortable — especially if you’re travelling with the family or for an extended period of time. Holiday homes also allow you to live your vacation through your own schedule. When staying in a hotel, you have no choice but to conform to its schedule for meals, housekeeping, fitness facilities, etc. Not so in a vacation home — prepare for hours of swimming when you want, eating when you want and shopping whenever the urge strikes you,” says Skigin. “Space is another massive selling point — you might find a hotel room that accommodates four people, but you’ll likely all be in one room with little privacy. Holiday homes offer a range of options and bedrooms, meaning space and privacy for the whole family or large groups of friends travelling together.”
Giving something extra also heightens the pleasure when guests book into a vacation rental, says Sharma. For instance, Hostmaker plans to have an app for the guests that will help them check in seamlessly. “We also plan to connect with ancillary services, such as a room service powered by a food delivery company or options to book restaurants and theatre tickets once they check in, as they could have done with a hotel concierge. These extra services can make a difference.”