Dubai’s real estate market has transformed into one of the most dynamic rental destinations in the world. Whether you’re an investor, landlord, or tenant, one of the biggest decisions you’ll face is choosing between short-term rentals and long-term leases.
Each option offers unique benefits—and challenges—depending on your goals, budget, and lifestyle. While short-term rentals promise flexibility and higher income potential, long-term leases offer stability and ease of management.
Understanding how both models work within Dubai’s legal and market landscape can help you make the right choice for your property investment or living needs.
Short-term rentals refer to furnished apartments or villas leased for a few days to several months, often catering to tourists, business travelers, and temporary residents.
Thanks to Dubai’s thriving tourism sector and flexible property regulations, short-term rentals have become a booming business. Landlords can legally rent out properties on a short-term basis by obtaining a holiday home license from Dubai’s Department of Economy and Tourism (DET).
Typical platforms used include Airbnb, Booking.com, and local real estate portals, where landlords can list properties for daily, weekly, or monthly stay
A long-term lease typically refers to renting a property for one year or more, as governed by Dubai’s Ejari system. This option suits residents, families, and professionals looking for stable housing.
Tenants pay rent annually, usually through one to four cheques, and both parties are protected under Dubai’s Law No. 33 of 2008, which regulates landlord-tenant relationships.
For investors, long-term leases mean predictable income, reduced turnover, and less management effort. For tenants, they provide a sense of permanence and lower costs compared to hotel-style stays.
Short-term rentals often generate higher returns per night compared to long-term leases. Especially in tourist-favorite areas like Dubai Marina, Downtown, and Palm Jumeirah, landlords can earn 30–40% more annually if occupancy remains high.
You can use the property personally during off-peak seasons or rent it out only when convenient. This flexibility appeals to investors who visit Dubai occasionally.
Landlords can adjust rental rates quickly based on demand. During events like Expo 2025 or peak travel months, nightly rates can surge, maximizing profitability.
Short-term rentals cater to international visitors, business executives, and tourists, creating a steady flow of new occupants.
Frequent tenant turnover requires regular cleaning, maintenance, and guest communication. Many landlords hire property management companies, which reduces profit margins.
You must register with Dubai’s DET and comply with regulations, safety standards, and furnishing requirements. Non-compliance can lead to fines.
Earnings fluctuate with Dubai’s tourism calendar. Low seasons may lead to reduced bookings and lower income stability.
More frequent use means faster wear and tear. Furnishings and appliances may need regular replacements.
Long-term leases offer consistent rent collection, often for a full year or more, reducing uncertainty.
With fewer turnovers and minimal maintenance requirements, long-term rentals are easier to manage and cost-effective over time.
Once your tenancy contract is registered with Ejari, you don’t need frequent renewals or additional licenses, simplifying the process.
Long-term tenants tend to care for the property, creating a mutually beneficial relationship with the landlord.
Once the contract is signed, the property is locked in for the lease term. Owners can’t use it personally or adjust rents mid-year.
If market rates rise, landlords must wait until renewal to increase rent as per RERA’s rent index guidelines.
Evictions or delayed payments can be time-consuming to resolve, requiring legal procedures.
Compared to short-term rentals, annual returns are typically lower, though more predictable.
Let’s consider a one-bedroom apartment in Dubai Marina worth AED 1.5 million.
| Rental Type | Average Annual Income | Estimated Occupancy | ROI |
|---|---|---|---|
| Short-Term Rental | AED 130,000–160,000 | 70–80% | 7–9% |
| Long-Term Lease | AED 110,000–120,000 | 95–100% | 5–6% |
While short-term rentals can yield higher income, they come with operational risks and management costs. Long-term leases offer reliability with slightly lower—but steadier—returns.
Following these legal frameworks ensures compliance and prevents future disputes.
The ideal choice depends on your goals, lifestyle, and investment strategy.
Many landlords in Dubai choose to partner with property management firms to handle either rental model. These companies manage listing, cleaning, tenant communication, and maintenance—especially valuable for owners who live abroad.
For short-term rentals, they can optimize pricing and maintain high occupancy. For long-term leases, they ensure smooth rent collection, renewals, and tenant retention.
While their fees range from 5–20% of rental income, they often help maximize net returns and reduce operational headaches.
From the tenant’s point of view, the decision also depends on lifestyle and duration of stay.
Understanding your target tenant helps you decide which strategy will bring better occupancy and profitability.
Dubai’s real estate market in 2025 shows a clear dual demand:
As Dubai continues to attract global professionals and investors, both models are expected to perform well—but for different audiences.
Some landlords are now adopting a hybrid strategy, combining both rental types based on market conditions.
For example:
This hybrid model balances flexibility with stability, but requires careful management and compliance with licensing laws.
While Dubai doesn’t impose income tax on rental earnings, landlords must consider service fees, maintenance, and tourism taxes (for short-term rentals).
Short-term rentals also attract a “Tourism Dirham Fee”, payable per room per night. Meanwhile, long-term rentals incur Ejari registration costs and occasional maintenance expenses.
Calculating total operational costs ensures you get a true picture of your net ROI before deciding on a strategy.
As Dubai continues to evolve into a global hub, both rental models are poised for growth.
The key for landlords is to stay flexible and adapt to market shifts. With careful planning, either model—or a mix of both—can deliver strong returns.
Choosing between short-term rentals and long-term leases in Dubai ultimately depends on your investment goals, time availability, and risk appetite.
If you value high returns and flexibility, short-term rentals can be lucrative—especially in tourist hotspots. If you prefer stability and simplicity, long-term leases remain a tried-and-true option.
Both avenues offer excellent potential in Dubai’s thriving real estate market. The secret lies in understanding your property’s location, audience, and management capabilities.
In the end, whether you choose to host short-term guests or long-term residents, Dubai’s rental market ensures your investment keeps working for you—every day of the year.
Do Follow Estate Magazine on Instagram
