It is a really common and old custom in the Italian, Spanish or French Riviera to lease out a property for a holiday-home for tourists. The business has proven powerful in those countries with strong tourism affluence and since Dubai is working on becoming an global vacation destination, it is intriguing to consider this investment prospect.
By renting a property on basis a landlord gets the chance to utilize the property for their personal use, create a high return of investment by renting it out to holidaymakers and at precisely the same time benefit in the property value appreciation.
The short term rental concept could be implemented anywhere in the world but the actual secret to its success lays in its execution within the local market in fact any successful business idea can be attracted to Dubai and establish a complete catastrophe, the concept by itself is nothing new and certainly not devised in Dubai so the actual heart of the business isn’t much in the idea as it is in its execution.
Having the idea and the product (the property) is just about 10 percent of the Company, what really matters is that the marketing which I would value at 70% and the actual daily running That Could be valued at 20 percent
Setting up an apartment for your short-term rental requires experience, interior designing abilities, attention to details and plenty of time and resources to follow up the furnishing procedure, utilities connections, daily running and marketing.
Some details are extremely important and if overlooked, will compromise the remain of your guests it is essential to prepare the property with your guests’ needs in mind rather than following a questionable personal taste.
One detail that is consistently overlooked is the actual efficiency of the bedrooms’ drapes, which at the vast majority of the cases do not block the windows’ light properly, this is usually due to lack of experience or to”great deal” ready-made curtains resulting in a horrible 6 am daily wake up call for your guests.
Another important aspect to acknowledge is the considerable investment to be made in purchasing the bathrooms face and body towels, it is in fact necessary to provide a high number of these so to allow a twice weekly replenishment and the same goes for bed sheets, quilt covers, pillow cases etc…
In most cases the”do it yourself” schemes work pretty well once you do have experience, knowledge and enthusiasm about what you are engaging with, other wise it will simply result in complete frustration to say the least.
Without considering the daily management issues and the inevitable guests complaints even the twice-weekly house keeping service is a far more demanding task then what it sounds…
A fair solution for this, especially if you’re handling more then 1 property, would be to refer the whole marketing and direction to a professional agent who for a commission (usually 20% of the rental) will take the weight off your shoulders with a smile.
In today’s marketplace a 5 celebrities marina-view one bedroom flat in Dubai Marina Face 1 (where all of the cafés and restaurants are) will rent for approx AED 95.000/- per year if unfurnished, the Identical property can fetch up to a AED 235.000/- a year if leased out supplied on short-term foundation and after deducting the 20% agency commission plus around AED 40.000/- for the 5 stars furnishing and approx AED 8.000/- a year for the utility bills, this will live the proprietor using a net AED 142.000/- (on occupancy rate of 79 percent )
The numbers speak for themselves however is important to remember that where there’s a fantastic yield there is also a certain risk and many will agree that the most delicate amount of the aforementioned calculation is that the occupancy rate which cannot be guaranteed in any property short-term leasing management contract.
Keeping the above consideration in mind, would you wish to engage a broker for your short-term rental requirements, it would be sensible to commit for a first trial period of maximum six weeks, this period will permit you to collect enough details and ought to provide you a good idea concerning the reliability and real potential of this agent/marketer you are coping with. Recently I’ve read an interesting article on property management on https://www.finehomesandliving.com/Is-It-Hard-to-Manage-a-Rental-Property/.
Would you get more hands-on with the business, you may opt for a non-exclusive marketing arrangement, also available in the sector and you will have the ability to market your property through additional agent/marketers and potentially increase your exposure however this isn’t necessarily the optimal solution in reality many brokers will provide priority to the properties of these clients with whom they have contractually dedicated with.