How to launch to rent out apartments for vacation stay in Dubai
Nowadays Dubai is one of the world's fastest growing tourist centers. Therefore, Government of Dubai pays great attention to the development of the industry of short-term (daily) rents for apartments.
Our team has an experience in launching and managing a short-term rent service, so we would like to share it with you. What you need to do to launch a your business associated with rentals, as Airbnb is called, and what you need to look for.
Legal basis for short-term rental service
The short-term rental activity in Dubai is called Holiday Homes and is regulated by the Dubai Economy and Tourism Department (here DETD).
There are two types of regulation:
✔️ for individuals - owners and tenants of housing;
✔️ for operators - companies providing professional services.
For individuals the first legal step is to get the Owner Permit, which costs 1,520 dirhams. The number of owned apartments for rent is not limited; the number of apartments rented for long-term lease for the purpose to sublease on daily base - no more than one.
For each of the apartments an individual must obtain a Unit Permit from the DETD. The cost is AED 300 per bedroom plus AED 70 for the entire apartment. Unit Permit is renewed annually.
When renting a previously rented long-term apartment for short-term lease, the Tenant must also provide the consent of the Owner of the apartment.
Registration as well as subsequent actions are made online: https://hh.dtcm.gov.ae/holidayhomes
DETD sets requirements that each apartment must comply with regulations. For example, every apartment must have a fire extinguisher, first aid kit, prayer mat, escape plan, 100% impenetrable curtains, telephone, safe, beds, bedding and more. The list of requirements can also be downloaded from the DTCM website.
Compliance is verified by DETD inspections.
Registration of guests and payment of mandatory payments
In the process of activity, the Owner (Operator) is obliged to register the check-in / check-out of each group of guests with the upload of documents and personal data on the DETD website, to pay the fee every month, which is Tourism Dirham (tax) in the amount of 10 dirham per each bedroom per night.
When the owner lives, the corresponding registration is also made, but Tourism Dirham is not credited. For guests staying more than 30 days - for this period more than 30 days, Tourism Dirham is also not credited. The owner as an individual is not a VAT payer.
Promotion and placement
Attraction of guests can be done in several ways using:
✔️ Specialized online sites, such as Booking, Airbnb, VRBO, TripAdviser. On these websites, guests can book online, including if they meet the conditions you set - without additional agreement with the manager. To eliminate the risk of double booking for the same dates, do not forget to set synchronization, the portals provide this opportunity;
✔️ Offline local portals;
✔️ Social networks;
✔️ Own website;
✔️ Advertising in search engines Google, Yandex.
Professional management of short-term rental service
As mentioned above, to carry out activities like Holiday Home there are professional licenses for operator-companies. The regulation of their activities is similar, but the list of requirements is broader (for example, the insurance).
Of course, from the point of view of building a long-term brand and expanding business opportunities, the activity of Holiday Home as an operating company is more attractive.
(updated January 2022).
If you own an apartment in the coastal areas of Dubai - JBR, Dubai Marina or Palm Jumeirah and want to earn additional income while not living in the UAE, we can help you to manage your short-term rental service.
