Long-term or short-term rental in Dubai: how to actually compare

Every few months an owner calls me with the same dilemma: put the apartment on a long-term Ejari contract, or run it as a short-term holiday home. I don't have a stock answer, because the honest one depends on numbers only the owner holds.

This isn't going to be a pitch for short-term rental. For a good number of owners, long-term is the better call, and I'd rather say that plainly than sell you a dream. Here's how I actually walk through the decision, plus a grid you can fill in with your own figures.

The long-term case: Ejari and the RERA rental index

Ejari is the Dubai Land Department's tenancy registration system. Every residential lease in Dubai has to be registered there, long-term or not. Once your contract is in Ejari, both sides are protected: the tenant can prove their address for visas and schools, you can prove the lease in case of a dispute, and DEWA won't open an account without it. It's paperwork, but it's the kind that works in your favor.

The RERA rental index, run through DLD's Smart Rental Index, is the part that actually shapes your income. When a long-term tenant renews, the increase you're allowed to apply depends on how far your current rent sits below the index value for that area and unit type. Rent close to market value, and you can't raise it much. Rent well below market, and you're allowed a bigger jump. Either way, you're not setting the number freely, the index sets the ceiling.

What you get in exchange is predictability. Rent usually arrives as one or a handful of post-dated cheques for the year, cashed on fixed dates. No daily pricing decisions, no guest messages at 2am, no cleaning schedule to manage. For an owner who wants the apartment to run itself, that's the whole appeal.

What you give up

You give up upside. If demand spikes, a long-term tenant doesn't pay you more that month, the index doesn't care about a busy event season. You also lose flexibility: a signed Ejari contract runs its term, and you can't decide mid-year to switch strategy without going through notice periods and, often, the tenant's agreement.

The short-term case: more upside, more moving parts

Short-term rental removes the ceiling. Nothing in Dubai law caps what you charge a guest for three nights in December. But that upside comes with volatility built in. Dubai's short-let demand swings hard across the year, and July or August look nothing like November or February. I've written a full month-by-month breakdown in Dubai Airbnb seasonality if you want the detail.

Then there are the fees layered on top of that variability. Airbnb takes roughly 15 to 17 percent, Booking.com 15 to 20 percent. If you're using a manager instead of running it yourself, add a management commission, ours is 17 percent, structured to replace most of your own time on the property, not to stack on top of your other costs.

Running costs don't stop there. DEWA and internet are yours to carry, not a tenant's. Cleaning happens after every single stay, not once a year. Supplies get restocked constantly. And every occupied room, every night, carries the Tourism Dirham, 10 AED for a Standard Holiday Home or 15 AED for a Luxury Holiday Home, collected from the guest but still a line you manage on every booking (Executive Council Resolution No. 2 of 2014).

The DET holiday home permit itself is a fixed, known cost: 300 AED per bedroom, capped at 1,200 AED per unit per year (Executive Council Resolution No. 49 of 2014). Renewing it every year is a short process once you've done it once, mostly a matter of keeping documents current.

Build your own comparison grid

I'm not going to hand you a return percentage and tell you it applies to your apartment. Occupancy, nightly rate and even the building itself change the answer too much for that to be honest. What I can give you is the grid I actually use with owners, line by line, so you fill it with your figures, not mine.

Once that grid is filled, the comparison stops being about which model sounds better and starts being about what your specific apartment, in your specific building, actually nets you after every cost line.

Who should probably stay long-term

Some profiles come back often enough that I'll say it plainly: for these owners, long-term usually remains the right call, even before running the numbers.

• Owners living abroad who have no time or local contact to oversee turnovers, maintenance and guest questions.
• Owners who need a fixed, predictable sum every month or quarter to cover a mortgage or service charge, and can't absorb a quiet month.
• Units in buildings where the owners association or management rules restrict short-term letting, check this before anything else (see does your building allow Airbnb).
• Owners planning to sell within a year or two, who'd rather keep things simple than restart an operation they'll soon hand over.
• First-time landlords who want to see how the market behaves for a year before committing either way.

A middle ground exists

Long-term and short-term aren't the only two options. Medium-term, monthly stays sit in between: longer than a holiday booking, shorter than a yearly lease, often paid in a small number of transfers rather than nightly bookings. It suits the slower months particularly well. I go through the mechanics in monthly stays in Dubaiincluding when it makes sense over either extreme.

None of this is a verdict in either direction. It's a method: get the real cost lines for your apartment, check what your building actually allows, and decide with your own numbers instead of a ratio someone quoted you.