According to the Globalinsights statistic report, Dubai welcomed 17.15 million visitors in 2023. This number is more huge than any other preceding year.
These statistics show a huge potential in the home rental business because not every tourist can afford to pay high rent. That’s why, if you own any property in Dubai, you can profit by renting it out. But, before you do this, you need a holiday home business license in Dubai.
Don’t worry; here we will explain how to start a holiday business in Dubai. You will get to know everything from what it is to the requirements and the steps to start; all you need is to stick with us till the end.
So, let’s dig in.
What is the Holiday Home Rental Business in Dubai?
Dubai is attracting a huge number of visitors from around the globe. As a result, the need to rent apartments in the short term is also increasing. That’s where you can benefit and earn profit by renting out your property for a short time.
Due to its increased demand, the holiday home rental business is becoming popular daily and an income source for many.
According to DED (Dubai Department of Economic Development), people can offer well-furnished apartments or lodgings under the vacation home rental business. Travelers can rent it out on a monthly, weekly or even daily basis. However, the owner of these properties must gain a license that will entitle him to rent the property for the short term.
Simple as that!
Requirements/Regulations of Starting a Holiday Home Business in Dubai:
Like any other business, the holiday home business in Dubai, UAE, also needs to fulfill certain requirements and here is a list of a few of them that are a must.
- Property owners must apply for a holiday home permit to rent properties for short stays legally.
- It’s mandatory to secure a license for holiday homes. Dubai offers two types of permits to such businesses – individual or corporate.
- Your property must meet certain standards for health, safety, and hospitality. They must be well-maintained, clean, and equipped with fire alarms and secure locks.
- Holiday homes should be fully furnished with Wi-Fi, kitchen appliances, and high-quality bedding. This makes the property more appealing and complies with hospitality expectations.
- The license holder must provide the guest’s details to the DTCM.
- Owners must register their property lease through Ejari, Dubai’s official rental registration system. While Ejari is generally for long-term rentals, it’s essential to document the property and ensure it’s legally registered.
- Having adequate insurance to cover property damages, accidents, and liabilities involving tenants is recommended.
- Prices must be transparent and displayed in marketing materials. Dubai Tourism monitors holiday home pricing, so avoiding misleading advertisements or price inflation is essential.
- All advertising and listing content must accurately reflect the property’s condition, location, and amenities.
- Most holiday homes can be listed on platforms like Airbnb, Booking.com, or similar vacation rental sites.
- Dubai also charges a tourism fee per room and night for holiday homes. This fee is charged to guests and varies depending on the property’s star rating.
- Remember, some residential communities in Dubai may restrict or prohibit short-term rentals. That’s why you must ensure the property’s homeowners association (HOA) allows holiday home operations.
- There must not be any extra charges for things like water or electricity.
- All the holiday houses, their prices, registration and approvals will be inspected by the relevant authorities like DTCM or DED.
- Lastly, informing neighbors or building management about holiday home activities is advisable to avoid complaints or disputes.
How to Start a Holiday Home Business in Dubai?
Starting a holiday home business in Dubai is hassle-free compared to the others. You only need to take fewer steps.
Here is a breakdown of each step.
Select your Business Activity:
The first step of starting a holiday home business is clearly defining your business model. It will help you define the legal requirements and ensure smooth operations within the city.
For a holiday home business, you must select a specific business activity that aligns with your goals. In this case, the most relevant option is the “Vacation Homes Rental” activity. Later, you can register it through the Department of Economic Development (DED) in Dubai.
Choose a Business Name:
After deciding on your business activity, the next step is to choose a unique business name. Dubai has strict guidelines for business naming to maintain professionalism and clarity. That’s why you must select a business name cautiously and beforehand.
We suggest avoiding any offensive language or names that resemble existing businesses. Also, your business name must not have any religious references or abbreviations. Using any acronym instead of a full name is also not recommended.
Once you’ve chosen a name, submit it to the DED for approval. This name will become part of your brand and reflect your holiday home service. The key is to make it both memorable and appropriate.
Obtain License:
Now, it’s time to apply for a license from the DED. In case of any random inspection, you also need a certificate from the Department of Tourism and Commerce Marketing (DTCM).
You’ll submit a completed application and relevant documentation, including passport copies, photos of the business owner(s), and any information about the property you intend to use.
With a “Vacation Homes Rental” license, you’ll legally operate in Dubai’s rental market and comply with local regulations.
Secure your Visa:
Now, after securing your licenses, you must have a residential permit if you are willing to start your rental agency in Dubai.
That’s why you’ll require a residency visa if you’re a foreigner. You can apply for it through DED or the Dubai Immigration Department. You can also apply for it after receiving your trade license. It will grant you legal residency in Dubai and open opportunities for property investment and other business activities within the UAE.
How to Get a Holiday Home License in Dubai?
Register your business with the Department of Economic Development (DED). You only need to choose “Vacation Homes Rental” as your business activity and submit your trade name for approval.
Once the trade name is approved, complete the application by submitting the necessary documents. It includes passport copies, photos, and your holiday home property information.
After receiving your DED trade license, apply for a holiday home permit through the Dubai Department of Economy and Tourism (DET). This application requires you to submit the following documents:
- The property title deed,
- Emirates ID or passport copy,
- Recent Dubai Electricity and Water Authority (DEWA) bill,
- A property management letter (if applicable).
Upon approval, pay the fees, which typically include an AED 370 annual fee and receive your permit.
You should also obtain approval from the Department of Tourism and Commerce Marketing (DTCM), which regulates the tourism industry in the UAE.
Pros and Cons of Home Rental Business in Dubai:
| Pros | Cons |
|---|---|
| Dubai’s rental market often offers higher returns of 5-9% on average compared to other global markets. | Purchasing property in Dubai requires a significant upfront investment, especially in popular areas like Downtown or Dubai Marina. |
| Dubai has no income tax on rental earnings. It allow property owners to retain full profits. | Short-term rentals often require more management, including cleaning, guest communication, and property maintenance, leading to higher operating expenses. |
| Strong tourism of position of Dubai also make it a profitable business especially during peak seasons. | |
| There is a constant demand for both short-term and long-term rentals. |
FAQ:
Do I need a license for Airbnb in Dubai?
You need a short-term holiday home rental business license for Airbnb in Dubai. The permit must be renewed annually. It will allow you to legally welcome short-term guests and earn rental income in Dubai.
How much is Airbnb income in Dubai?
According to an estimate, a typical Airbnb host in Dubai earned AED 147k of annual revenue in 2023. If you host in popular areas like Downtown Dubai, Dubai Marina, and Jumeirah Beach Residence, you can earn around AED 15,000 to AED 25,000 monthly from a one-bedroom apartment. During high tourist seasons, this income may increase significantly.
How much does it cost to start an Airbnb business in Dubai?
The modest startup Airbnb business could cost between AED 15k to 30k. It includes licensing fees, annual permits, or regulatory compliances.
We hope this comprehensive guide on starting a holiday home business in Dubai has helped you gain some valuable insights. Suppose you need any more information. Write in the comment section; we would love to assist you.
