# property investment / short-term rental



## ttdubai (Dec 28, 2015)

Good morning!
I have done lots of research over the last time, as I wanted to buy properties as an investment. In comparison to Europe, the rental yield is extremely high and the legal conditions are good:

8-10% in some areas for apartments, whereas in big cities in Europe you can hardly earn 3 % and still have to pay taxes on it.

I have found out that lots of property owners do short-term rental with their apartments, e.g. rent them out on platforms like AirBnb. In the right areas (apartment in Marina for example), even higher yields can be achieved.

Is is mandatory to register with Department of Tourism and Commerce Marketing (DCM), but as a minimum of 20 apartments is needed for such a registration, most owners don't do that. It is kind of a "grey area" at the moment. (The other option is to co-operate with a licensed operator company which will cost 10 - 25% of the earnings.)

Does anybody of you does short-term rental with his/her property and would like to share some experiences?

I know this will not be passive income like normal rental income because short-term rental has to be regularly taken care of, key handover to guests, cleaning etc. will have to be organized.

What do you think?


Best,
T.


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## mariot (Nov 4, 2013)

ttdubai said:


> Good morning!
> I have done lots of research over the last time, as I wanted to buy properties as an investment. In comparison to Europe, the rental yield is extremely high and the legal conditions are good:
> 
> 8-10% in some areas for apartments, whereas in big cities in Europe you can hardly earn 3 % and still have to pay taxes on it.
> ...


DLD has no problem with airbnb as long as title holder of property has authorised short/sublets, they don't insist on registration unless you're running a business.
Just remember you'll be paying dewa etc whether tenanted or not.
Also no tenant you have would qualify for ejari to sponsor visas etc


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## twowheelsgood (Feb 21, 2013)

ttdubai said:


> In comparison to Europe................. and the legal conditions are good:


You think the legal conditions here are better than in Europe ?

How so ?


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## ttdubai (Dec 28, 2015)

twowheelsgood said:


> You think the legal conditions here are better than in Europe ?
> 
> How so ?


From the landlord's point of view, you can easier evict for non-payment. In German-speaking countries in Europe, it takes months to years to get a judgement and further months to get an appointment with the court officer for eviction. And there are lots of tricks which the tenant can use to delay the whole process.

It is just a different system here: Rent is (for a certain time) "guaranteed" because of prepayment, you don't have to run after monthly payments. I had a tenant in Europe whom I had to remind every single month because he never paid in time...and due to the tenancy law over there, it was not possible for me to cancel the tenancy agreement.

For clarification: AirBnb rentals are usually for 1 day to 1 week (holiday, business travel, or first weeks over here after relacation), so none of them would need Ejari, visa sponsoring etc.

Is anybody out there who could share some experiences? Does anybody rent out on AirBnb?


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## mariot (Nov 4, 2013)

ttdubai said:


> From the landlord's point of view, you can easier evict for non-payment. In German-speaking countries in Europe, it takes months to years to get a judgement and further months to get an appointment with the court officer for eviction. And there are lots of tricks which the tenant can use to delay the whole process.
> 
> It is just a different system here: Rent is (for a certain time) "guaranteed" because of prepayment, you don't have to run after monthly payments. I had a tenant in Europe whom I had to remind every single month because he never paid in time...and due to the tenancy law over there, it was not possible for me to cancel the tenancy agreement.
> 
> ...


Easier to evict in Dubai, really?


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## The Rascal (Aug 6, 2014)

ttdubai said:


> From the landlord's point of view, you can easier evict for non-payment. In German-speaking countries in Europe, it takes months to years to get a judgement and further months to get an appointment with the court officer for eviction. And there are lots of tricks which the tenant can use to delay the whole process.
> 
> It is just a different system here: Rent is (for a certain time) "guaranteed" because of prepayment, you don't have to run after monthly payments. I had a tenant in Europe whom I had to remind every single month because he never paid in time...and due to the tenancy law over there, it was not possible for me to cancel the tenancy agreement.
> 
> ...


Firstly you DO need to register with Tourism to utilise airbnb.

Secondly you are so wrong about Germany, it takes weeks to evict over non payment.

Thirdly, if you seriously have the money to buy 20 apartments, then why are you asking questions on a free forum.

Cloud cuckoo land anyone?

http://www.thenational.ae/uae/tourism/legal-grey-area-of-residents-subletting-dubai-homes-on-airbnb

and

http://dubaieye1038.com/listing-your-home-with-airbnb-you-must-comply-with-dubai-tourisms-new-rules/


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## ttdubai (Dec 28, 2015)

Hey Rascal,
I do not know you so I do not understand your tone of voice in this posting.

If you had read my first posting, you would have seen that I already stated that DCM registration is mandatory. (See above.)

I think you are not well-informed about Germany. I have apartments there that are rented out. As I said, it takes months to years to evict. It is the worst place ever to be landlord (next on the list is Austria).

I am asking this question on a "free forum" because this is part of a sensible research. So maybe anyone has made personal exprience on this topic.

(By the way, where is the link to the non-free forum?)


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## QOFE (Apr 28, 2013)

It's more of a black and white rather than grey area. As the authorities have stated that the short term rental market is not available for individuals you would be taking a large risk by doing it.

Have you thought of insurance issues? What if the short term tenants trash the place or even worse, a crime is committed in your property?

Here's something to read and have a think about:
http://www.nytimes.com/2014/12/06/y...coverage-but-hosts-still-have-risks.html?_r=0
4*Things Every UK*Airbnb*Host Needs to Know About Insurance - Budget Breakaway
Airbnb hosts are â€˜taking risk with their financesâ€™ - The Scotsman
Yes, these are links about US and UK but nevertheless they highlight some insurance issues and potential problems.

Just because others are doing it and getting away with it doesn't necessarily mean that you will be successful with it.
Wipe the dollar signs out of your eyes and investigate this properly.

How about renting out long term? Wouldn't that be more reliable income than short term? Your property could stand empty and humid for several months during the hot months as the demand would be a lot lower then.

You're complaining about unreliable tenants in Europe. How about being a bit more selective who you rent out to? I know that in Germany the landlords can demand a lot more than here in Dubai. Salary certificates, three months deposit and insisting on rent payment with direct debit/standing order.


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## ttdubai (Dec 28, 2015)

Hello QOFE,
thank you very much for your input. As I wrote in my first post, there are 2 possibilities in Dubai:

1.) get an own license (min. 20 properties),
2.) co-operate with licensed operator

With one of these 2 possibilities, it is completely *legal*. I did not intend to do something illegal.

Sure, you can demand anything you need from tenants in Germany, but in my experience that does not guarantee anything: People can lose their job, people can get into any financial trouble, people can pretend to be something that they are not etc. It is illegal to insist on direct debit, tenants are free to pay how they like. Even if you use direct debit (European SEPA direct debit system), this can be canceled by the tenant. Also, if tenants' bank account is empty, direct debit won't be executed.
It is not a matter of selection, it is a matter of the whole system that is "tenant-friendly".

But the European rental market should not be the topic here...

Best, 
T.


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## The Rascal (Aug 6, 2014)

ttdubai said:


> Hello QOFE,
> thank you very much for your input. As I wrote in my first post, there are 2 possibilities in Dubai:
> 
> 1.) get an own license (min. 20 properties),
> ...


You're not getting it are you, you need to license even if you have ONE apartment on short term let. (See details above).

As for Germany, I spent a year there and the entire rental market is skewed towards the landlord (in Baden Wurtenburg at least), I know to my cost.


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## QOFE (Apr 28, 2013)

The Rascal said:


> You're not getting it are you, you need to license even if you have ONE apartment on short term let. (See details above).
> 
> As for Germany, I spent a year there and the entire rental market is skewed towards the landlord (in Baden Wurtenburg at least), I know to my cost.


As a former tenant in Germany I do agree with Rascal too. 
Tenant has to pay the estate agent fee. Tenant has to (usually) pay for a full kitchen (including all cupboards, sink, taps, white goods). Tenant has to paint the apartment.
The break clause is tedious for tenants. 
I cannot accept any moaning from a German landlord.


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## ttdubai (Dec 28, 2015)

We have a little misunderstanding...

The 2 possibilities are:

_1.) get an own license:_
*It is not possible to get a license with "one apartment".* DCM only issues licenses for operators with a *minimum of 20* apartments. If you have 1, 2, 5 or 19, you cannot get a license, you have to co-operate with a license holder.

2.) co-operate with a licensed agent/operator
There are lots of "holiday home" operators that offer their services. They have a DCM license as they are operating more than 20 apartments, and for a service fee of some %%, they will manage the property completely.

But, apart from the licensing issue (I think this has been entirely discussed now), I wanted to know if anybody has actually done renting out short-term...


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## ttdubai (Dec 28, 2015)

QOFE said:


> Tenant has to pay the estate agent fee.


Incorrect. Landlord has to pay (more exact: The one hiring the agent has to pay which is always the landlord.)
(But, you are right, this has been changed recently, before, the tenant had to pay.)



QOFE said:


> Tenant has to (usually) pay for a full kitchen (including all cupboards, sink, taps, white goods).


Usually, kitchen is already in the apartment.



QOFE said:


> Tenant has to paint the apartment.


Only if agreed to in the rental contract. If not, nothing has to be done.

But...let's not discuss the German rental market, actually I wanted to open a discussion about Dubai short-term rentals...


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## QOFE (Apr 28, 2013)

So what you're saying option one is out of question for you. And it seems you're not keen on option two either due to the high fees. You're after option three with "approval" of somebody saying it's all good and about how much money they made. 
Right?

Have you thought of the logistics of option three? Are you living here so you can deal with organising cleaning, organising maintenance, handing out keys/collecting keys just mentioning the basics. 
If you outsource the above that will cost too. It will also be expensive to have a property standing empty. Who do you think will want to come here during the hot months? If you rent your property out long term you will have more chance of a steady return.


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## ttdubai (Dec 28, 2015)

QOFE said:


> So what you're saying option one is out of question for you. And it seems you're not keen on option two either due to the high fees. You're after option three with "approval" of somebody saying it's all good and about how much money they made.
> Right?


Sorry, but after so many postings, I don't think I have to answer to this any more.

I did *not* say that anything is out of question for me, and I did *not* say that any fees are too high (see above). I just quoted that regulation issues that I had found out before so that this thread can also be useful to somebody who is interested in this topic or finds this on Google.

I did not ask a question about money, and I do not want to know any of your financial backgrounds, and I do not want to disclose mine.

I do not understand where this "discussion" is going, and I feel some (unexpected) animosity here, which I cannot understand.

As you can imagine, I have made research before, so I know the calculation and the numbers of holiday rentals very well.

About the logistics, I wrote in my initial post:



> I know this will not be passive income like normal rental income because short-term rental has to be regularly taken care of, key handover to guests, cleaning etc. will have to be organized.


So maybe somebody is out there who could just share his or her experiences with short-term rental.


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## Stevesolar (Dec 21, 2012)

ttdubai said:


> Sorry, but after so many postings, I don't think I have to answer to this any more.
> 
> I did *not* say that anything is out of question for me, and I did *not* say that any fees are too high (see above). I just quoted that regulation issues that I had found out before so that this thread can also be useful to somebody who is interested in this topic or finds this on Google.
> 
> ...


Hi,
To be honest - you are unlikely to find anybody on this forum who is already doing what you suggest.
Reason - it's a bad idea financially and although looks good in theory, would be a nightmare to administer and make money in Dubai.
Stick to conventional annual rental properties, treat your tenants right, get good maintenance contracts in place and buy in the right, popular locations (to ensure properties are easy to rent and have good purchase price versus rent yield) - that's my advice!
There are some amazing locations in Dubai that are still reasonable to purchase, attract good rental yields and are easy to maintain - these are what you need!
Cheers
Steve


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## twowheelsgood (Feb 21, 2013)

ttdubai said:


> I do not understand where this "discussion" is going, and I feel some (unexpected) animosity here, which I cannot understand


This is why my first question was as to why you think rentals are easier here than in Germany.

Those of us who actually live here (which outweighs any 'research' you may think you have done well) tells us that the Dubai rental market is heavily weighted in favour of tenants in that;

You cannot get rid of people when you feel like it.
The legal system is balanced in the tenants favour
There is in effect, no such thing asDirect Debit

Also;
Practically all hotels sell short term apartments.
The holiday market is saturated with good hotels at low prices and is getting more so for 2020.

Rental fee/rate information is well known through publicly available data so expecting to make much more than the average is optimistic.

The market here goes up and down like a yoyo and nobody is making a high yield. Lots of empty properties here, lots coming online, prices dropping and any expectation that you'll get high occupancy for a short term let is optimistic (or so say those who actually live here).

Nobody is getting at you per se but you'd be surprised how many people come on here for advice, and get all snippy when they begin to realise its not El Dorado here and their bright idea has been seen, done and failed many times before them.

Personally, I wouldn't even consider AirBNB here - too many good, cheap clean hotels all over Dubai for apartments.


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## ttdubai (Dec 28, 2015)

twowheelsgood said:


> Those of us who actually live here (which outweighs any 'research' you may think you have done well)


As you might have seen in my profile, I live in Dubai, too. It is not possible to manage short-term rental from abroad.

But anyways, thanks for your input.

Thanks also to Stevesolar.


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## notdave (Jul 11, 2015)

twowheelsgood said:


> Personally, I wouldn't even consider AirBNB here - too many good, cheap clean hotels all over Dubai for apartments.


Ah... AirBNB... last years leasing panacea to next years litigation and insurance nightmares.

Man who let out home on Airbnb for new year suffers £12,000 damage | Technology | The Guardian

At least substantive measures have been taken... “We have zero tolerance for this kind of behaviour and this guest is no longer on Airbnb"... I'm sure that will help with the clear up...

I am just saying... that's all...


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## saya123 (Dec 11, 2008)

Considering airbnb falls in the grey area which to me is more black than grey.. even if someone here is letting his units on the site will not openly admit to it as nobody would want to get caught for doing something not allowed legally. So I don't think this is the right forum to be getting answers with regards to this.


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## ttdubai (Dec 28, 2015)

saya123 said:


> Considering airbnb falls in the grey area which to me is more black than grey.. even if someone here is letting his units on the site will not openly admit to it as nobody would want to get caught for doing something not allowed legally. So I don't think this is the right forum to be getting answers with regards to this.


Have you read all the previous posts?

It is not illegal, and there is nothing to hide about.

But anyways, thanks for all the answers.


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