Dubai, one of the fastest growing metropolitan cities around the world, is also a densely populated city in the United Arab Emirates. Owing to its strategic location, strong infrastructure, stable political environment and constant focus on smart innovation, the city has gradually become an ideal location to be in for a comfortable lifestyle. Following the announcement of long-awaited residence visa and business ownership, Dubai has been witnessing a massive interest from overseas potential investors and entrepreneurs.
Every other modern development is an example of engineering brilliance and includes innovative technologies that ensure modern living. These factors add value thus, majority of these properties provide a considerable return on investment. Do you still need more reasons to consider why you must invest in Dubai or you are convinced? Now, Dubai offers many investment opportunities in property sector, both in ready-to-move-in and off-plan properties.
Vacation rentals in Dubai
Dubai offers a number of real estate solutions. Investing in Dubai real estate sector has also taken a whole turn since the onslaught of the global pandemic and that is vacation rentals in Dubai.
Vacation rentals in Dubai – A profitable idea
During 2022, a massive investment was done in Dubai real estate by high-net-worth individuals. The major dilemma for investors is to choose between holiday homes and long term rentals. It is because, a majority of investors used these properties to stay but invested there with the purpose of using it as vacation homes in Dubai with the intent to earn profit, while letting them ahead.
Nested, a London-based real estate agency, has recently conducted a study to compare average time to recover property investment through conventional rent versus short term or holiday rentals. And according to results, vacation rentals prove to be a better investment option especially in cities like Dubai.
Depending upon the neighbourhood and the condition of your property, the owner can earn anywhere between 10 and 50 per cent more than the conventional long-term rental properties in Dubai. And if they continue renting out their properties year long, property owners can surely earn 20% more on year on year basis because holiday makers usually pay more for short stay.
Dubai secured 9th place globally, with a 3-bedroom property taking 187 months to remunerate the purchase value via conventional rent and only 46 months to reimburse the purchase price based on short-term rental rates. It is notable that the report assumes the ability to keep your vacation homes in Dubai booked, consistently.
Dubai – The best city to live, work and visit
According to a report by the Resonance Consultancy, a leading global advisor in tourism, real estate and economic development, Dubai has secured the fifth spot in the list of best cities in the world, in the World’s Best Cities report for 2023. And as per a CNBC article, Dubai ranked number 2 in the list of the best cities for expatriates.
The report ranked global cities with a population of one million or more, while evaluating quantitative performance data and qualitative assessments from residents and visitors – divided into six categories including place, product, programming, prosperity, people and promotion.
Though it has been declared time and again that Dubai is one of the safest cities in the world that offers conducive business environment and idyllic lifestyle facilities. Also because the cost of living in Dubai is much lower than the living cost in other holiday home cities like Rome, New York, Lisbon and Marbella. Based on all these features and facilities, Dubai became the best place to live, work, invest and visit in 2023.
Resultantly, vacation homes in Dubai will also be in higher demand this year. It brought a spectacular chance for property owners having vacation homes to rent these properties on short term basis and enjoy promising returns on investment.
Higher demand for vacation homes in Dubai
Dubai was one of the first cities in the world that opened its international borders for tourists. People took advantage of the situation and chose to travel abroad but to keep the precautions in view, a majority of them preferred staying in vacation homes in Dubai. Also because, it is feasible to follow COVID-19 related protocols while staying at a place with your family members only, instead of staying at a bigger space. This mindset has accelerated the demand for vacation rentals in Dubai and given a boost to Dubai’s holiday homes market.
Instead of staying in any cramped hotel room at competitive price and compromising on individual facilities, people prefer space and luxury – a vacation home in Dubai offers.
Investing in vacation homes in Dubai – A viable option
According to airdxb, a holiday home operator in Dubai, the average length of stay in Dubai by short-term guests increased in 2020 compared to 2019 and the duration is expected to increase this year. Potential investors already gauged the interest and understood the market trend, thus they preferred investing in vacation rentals in Dubai. Another notable trend is that properties located in prime areas are in higher demand as compared to properties located in secondary areas. And a robust demand conduces to the further launch of luxury projects in Dubai, which eventually increases your chances to secure better performing properties.
It is also because holiday makers prefer staying in luxury properties in prime areas to swiftly access key destinations in the emirate. And a good vacation rental property can cover the mortgage (if any) and also help generate additional revenue.
Seasonal change in vacation rental prices
As you know, the demand for vacation rentals in Dubai is increasing at a tremendous level. It has become one of the most popular short-stay rental options in Dubai, which is also legal. A proper vacation rental management can also help you secure better outcomes in terms of profit. Moreover, the profit can be increased by raising rental prices during high demand seasons and certain events. For instance, weather remains pleasant in Dubai from October till March and events like Expo 2020 leads to the increase in demand of vacation homes in Dubai.
Buy vacation homes in Dubai with HFRE
Not every property is fit to be a vacation rental in Dubai, as the most lucrative and ideal vacation rentals are self-managed. You can also hire a manager to take care of these matters, if you are ready to pay for vacation rental management. And it also remains suitable, if you have several properties in your portfolio.
However, if you find this idea of additional earning appealing, and have budget too – the returns can be rewarding. All you need is to discuss your investment plan and budget with the team HFRE and we will help you secure the best deals in the town. Call us at +971 4876 2473 or write us at info@hfre.ae and one of our representatives will get back to you as soon as possible.
