Dubai's short-term rental market is booming. Occupancy rates in prime areas exceed 85%, and yields can hit 8-12% — double what long-term leasing offers. But you can't just list on Airbnb and start hosting. Here's everything you need to know.
Is Short-Term Rental Legal in Dubai?
Yes — but regulated. The Department of Tourism and Commerce Marketing (DTCM) oversees all short-term rentals. You need a Holiday Home Permit before listing. Operating without one risks fines up to AED 200,000.
Getting Your Permit
Option 1: Self-Manage
- Register with DTCM through Dubai Tourism portal
- Obtain trade licence from DED (Holiday Home Operator)
- Register and pass property inspection
- Fees: ~AED 10,000-15,000/year licence + AED 370 registration
Option 2: Use a Licensed Operator (Recommended)
They handle DTCM compliance, listings, guest management, cleaning, and pricing. Typical fee: 15-25% of gross income.
Best Areas for Short-Term Rental
| Area | Nightly Rate | Occupancy | Yield |
|---|---|---|---|
| Downtown Dubai | AED 600-1,500 | 80-90% | 9-12% |
| Dubai Marina | AED 400-900 | 82-88% | 8-11% |
| Palm Jumeirah | AED 800-3,000+ | 75-85% | 8-10% |
| JBR | AED 500-1,200 | 80-88% | 9-11% |
| Business Bay | AED 350-700 | 78-85% | 8-10% |
| JVC | AED 200-400 | 70-78% | 8-10% |
Short-Term vs Long-Term: The Real Maths
1-Bed Dubai Marina (AED 1.2M):
- Long-term: AED 85K rent – AED 15K costs = AED 70K net (5.8% yield)
- Short-term: AED 150K gross – AED 60K (management + costs) = AED 90K net (7.5% yield)
Short-term nets ~30% more, but requires furnished property and tolerates vacancy risk.
Setup Costs
| Item | Cost |
|---|---|
| Furnishing (complete) | AED 30,000-80,000 |
| Kitchen setup | AED 5,000-10,000 |
| Linens & towels | AED 3,000-6,000 |
| Smart lock + photography | AED 2,500-5,500 |
| Total | AED 40,000-100,000 |
Key Regulations
- DTCM permit is mandatory — no exceptions
- Building approval required — some don't permit holiday homes
- Tourism Dirham: AED 10-20/night (collected from guests)
- All guests must be registered with DTCM
- Get specific holiday home insurance
Common Mistakes
- Operating without a DTCM permit
- Cheap furniture = bad reviews = low occupancy
- Ignoring seasonality (high: Oct-Apr, low: May-Sep)
- Not checking building rules before buying
- DIY management from abroad
Thinking About Short-Term Rental?
We help you find properties optimised for holiday home income — and connect you with licensed operators.