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Holiday Home in Dubai: How Much Can I Earn by Listing My Apartment as a Holiday Home?

20 November 2025 by
Alisha Bajaj

Turning Property into Profit — The Rise of Holiday Homes in Dubai

With its year-round sunshine, world-class infrastructure, and status as a global tourism hub, Dubai has emerged as one of the most lucrative destinations for short-term rental investments. Whether you're a seasoned investor or a first-time property buyer, converting your apartment or villa into a holiday home in Dubai can unlock impressive rental yields — often outperforming traditional long-term leasing. But it's not just about listing on Airbnb; Dubai has a well-regulated framework for holiday homes, requiring owners to secure proper licensing, meet hospitality standards, and manage operations efficiently. This comprehensive guide walks you through every step — from understanding the business models and legal compliance to calculating ROI, choosing the right property type, and identifying the best areas for investment. If you're exploring the idea of making your property work for you in Dubai's booming short-term rental market, this is your perfect starting point.

1. What Kind of Returns Can You Earn? Is it Profitable?

Income Potential

Apartments across Dubai, typical “gross yields” for long/short‑term rental are in the 7‑10% range, depending on area. 

Potential Returns:

  • Rental Yields: Short-term rental properties in Dubai often yield higher returns than long-term leases. In prime locations like Downtown Dubai, Palm Jumeirah, and Dubai Marina, gross rental yields for 2-3 bedroom holiday homes can reach between 7% and 10% annually.

  • Monthly Income: On average, Airbnb hosts in Dubai earn around AED 7,400 per month. Properties in prime locations with quality amenities can earn significantly more. 

  • Revenue per Available Room (RevPAR): According to the Department of Economy and Tourism (DET), the average revenue per available room in Dubai was just over AED 413, with listed rates averaging around AED 536. With an occupancy rate of 70%, this can translate to approximately AED 8,680 in monthly income.

Factors Influencing Profitability:

  1. Location: Properties situated in tourist hotspots or near major attractions tend to command higher rental rates and experience higher occupancy levels.

  2. Property Type and Quality: Well-maintained properties with modern amenities and appealing aesthetics are more likely to attract guests and secure premium rates.

  3. Occupancy Rates: Consistently high occupancy rates are crucial for maximising income. Factors such as seasonality, local events, and effective marketing strategies can influence occupancy.

  4. Management Efficiency: Effective property management, including prompt guest communication, maintenance, and cleaning, enhances guest satisfaction and encourages repeat bookings.

Comparison with Long-Term Rentals:

Short-term rentals often yield 10-20% more revenue than traditional long-term leases. This increased income potential, combined with the flexibility to adjust pricing based on demand, makes holiday homes an attractive investment option.

But Some Caveats

  • The above are gross yields: you must consider other operating costs like management fees, furnishing, utilities, maintenance, vacancy, and platform fees.

  • Short‑term holiday homes have more variability: higher maintenance, more intensive guest turnover, more marketing, and higher furnishing standards.

  • Location, quality of property, amenities, and management effectiveness matter a lot. 

Cost to Run a Holiday Home in Dubai

Operating a holiday home in Dubai involves various costs, including licensing fees, government charges, management expenses, and ongoing operational costs. Below is a detailed breakdown:

1. Licensing and Registration Fees:

  • Initial Registration Fee: To register your property with the Dubai Department of Economy and Tourism (DET), there's a one-time fee of AED 1,500, plus AED 10 each for knowledge and innovation fees, totalling AED 1,520.

  • Inspection Fee: A mandatory one-time property inspection incurs a fee of AED 320.

  • Permit Issuance Fees: For the classification certificate, the fees are AED 300 per bedroom, AED 50 per holiday home, plus AED 10 each for knowledge and innovation fees. For example, a one-bedroom unit would total AED 370. This is also a one-time fee. 

2. Annual Renewal Fees:

  • Permit Renewal: The annual renewal fees mirror the initial permit issuance costs, including the per-bedroom and holiday home charges.

3. Government Charges:

  • Tourism Dirham Fee: This is a nightly fee charged to guests, collected by the operator and remitted to the government. Rates are:

  • Local Government Fee: A fee of 10% of each holiday home reservation is payable to the local government. Dubai Business Setup

4. Management Fees:

  • Property Management Services: If you engage a property management company, fees typically range from 15% to 25% of the rental income. Established companies may charge higher rates due to their experience and service quality.

  • Platform Service Fees: Listing your property on platforms like Airbnb incurs host fees, usually around 15% of the booking subtotal. Like Home+1

5. Operational Costs:

  • Utilities: Owners are responsible for electricity, water, and internet bills. While short-term rentals often include these in the rental fee, it's essential to clarify this with guests. Like Home

  • Maintenance and Repairs: Regular upkeep is necessary to maintain property standards. Costs vary based on property size and condition.

  • Cleaning Services: Post-guest cleaning is essential. Fees are typically charged to guests, but coordination and quality control are the owner's responsibility.

  • Insurance: Comprehensive coverage for property and liability is advisable, with premiums varying based on coverage levels.

6. Additional Considerations:

  • Security Deposits: Often required to cover potential damages, ranging from AED 500 to AED 2,000, or 10-20% of the rental cost. Like Home

  • Furnishings and Amenities: Initial investment in quality furnishings and ongoing replacements add to costs.Latest news & breaking headlines

Understanding these expenses is crucial for budgeting and ensuring the profitability of your holiday home business in Dubai.

So is it Profitable?

Yes — it can be profitable in Dubai, especially if you:

  • Choose a good location with strong tourist/visitor demand.

  • Operate with a good occupancy and pricing strategy.

  • Manage your costs well (furnishing, cleaning, management, regulatory compliance).

  • Are aware of risks (seasonality, competition, regulatory changes, service charges).

If you treat it like a hospitality business (not just “rent it out and forget it”), the returns can justify the investment.

2. Legal Formalities & Paperwork: Step‑by‑Step

Here’s how you set up a holiday home in Dubai legally.

  1. Decide Your Model

  2. Owner-Operator Model

  3. This is the simplest and most common model for individuals or first-time investors.

  5. Key Characteristics:

  6. Aspect Description
    Scale Usually limited to 1–3 properties
    Licensing Register your individual unit with the Dubai DET under your name
    Listing Platforms Airbnb, Booking.com, Vrbo, etc.
    Operations Self-managed or outsourced to a third-party property manager
    Revenue Earns income from nightly bookings (minus platform/cleaning fees)
    Guest Interaction Responsible for communication, check-in/out, issues, etc. (or hire someone)

  7.  Regulatory Requirements:

    1. You must register with the Dubai Department of Economy & Tourism (DET).

    2. You get a permit per unit.

    3. Submit your Emirates ID or passport copy, Title Deed/Sale Agreement, DEWA bill, and NOC from the building management.

    4. Pay the holiday home permit fee annually per unit.


    Pros:


    1. Simple to set up

    2. Low cost to start

    3. Full control over property and earnings

    4. Ideal for investors or homeowners testing the short-term rental market


    8. Cons:

    • Time-consuming if self-managed (bookings, cleaning, guest requests)

    • Limited scalability

    • May face compliance issues if not properly registered


  9. Holiday‑Home Operator / Multiple Units? (As a Business)

  10. This is a company-level operation where you manage multiple units, either your own or on behalf of others.


  12. Key Characteristics:


  13. Aspect Description
    Scale 5–500+ units across Dubai
    Licensing Business license from DED as a "Vacation Homes Rental Operator"
    Branding Operate under a registered trade name and company identity
    Unit Type Can include apartments, villas, townhouses
    Client Base May manage properties for external owners on a revenue-share basis

  14. Regulatory Requirements:

    1. Set up a trade license via Dubai DED (Department of Economic Development).
    2. Get approval from DET for managing holiday homes.
    3. Create contracts with unit owners if not self-owned.
    4. Must follow classification guidelines (Standard vs Deluxe).
    5. Periodic inspections and audits by DET.
    6. Must handle guest registration and reporting via the DET system.


    15. Pros:

    • Scalable and high earning potential
    • Build a long-term brand in Dubai hospitality
    • Can manage for others and earn service fees
    • Eligibility to list on multiple platforms and corporate tie-ups


    16. Cons:

  • Higher regulatory and compliance burden

  • Higher upfront and ongoing costs (staff, offices, etc.)

  • Needs business acumen, tech support, and operations setup

  • Legal agreements with clients, insurance, and liability concerns


Feature Individual Host Professional Operator
License Type DET permit (per unit) DED Trade License + DET permits
Property Ownership Usually self-owned Self-owned or third-party managed
Scale 1–3 units 5–500+ units
Guest Management Self-managed or outsourced In-house teams, 24/7 support
Revenue Source Booking income Booking income + property mgmt fees
Platform Presence Airbnb, Booking, etc. Airbnb + own website + direct deals
Startup Cost Low to medium High
Brand Building Personal Business/Corporate


Apply  For the Holiday‑Home Licence / Permit

  1. Through the Dubai Department of Economy & Tourism (DET) portal: “Register to operate Holiday Homes” service. (Dubai Department of Economy & Tourism)

  2. Upload required documentation: title deed/SPA, Emirates ID/passport, recent DEWA bill, NOC from building/owner if applicable, etc. 

  3. Select your unit and self‑classify (Standard vs Deluxe), which affects certain fees. (binderr.com)

  4. Property inspection may be required. 

Pay the Required Fees

  1. Registration fee, inspection fee, permit fee (based on unit size/bedrooms). See the cost breakdown below.

  2. Also, there are nightly “tourism dirham” or similar guest‑levied fees that you must collect and remit. 

Comply With Ongoing Obligations

  1. Display your permit at the property.

  2. Ensure building/owner association permits short‑term letting (check NOC). 

  3. Follow rules around classification, guest registration (DET system), health & safety, etc. 

Operate the Property

  1. Furnish/equip the unit to guest standards.

  2. List on holiday‑home / short‑term platforms (Airbnb, Booking.com, or via a management company).

  3. Manage bookings, cleaning, maintenance, guest services, and pricing strategy.

The Paperwork/Documents You’ll Typically Need

  • Owner’s ID/passport (if individual) or company docs (if operator).

  • Title Deed or Sale & Purchase Agreement for the property. 

  • Recent DEWA (electricity/water) bill in the owner’s name. 

  • NOC / letter from Owners Association/building management allowing short‑term lease. (binderr.com)

  • Insurance policy (holiday home owner/operator).

  • Application on the holiday homes portal, classification, and payment of fees.

Key Regulatory Links and Steps

3. Costs Involved

Here’s a breakdown of costs — both initial setup and ongoing.

Initial & Licensing Costs

  • Registration fee: AED 1,520 (includes knowledge & innovation fees) for initial registration. 

  • Inspection fee: approx AED 320. 

  • Permit/classification fees (annual) based on bedroom count. For example: Studio/1‑bedroom - AED 370/year; 2‑bed - AED 670; 3‑bed - AED 970. 

Ongoing/Operational Costs

  • Tourism Dirham fee: Standard units: AED 10 per occupied bedroom per night; Deluxe units: AED 15 per occupied bedroom per night.

  • Property management fees (if using a holiday home management company) — e.g., 15‑25% of rental income (varies). 

  • Utilities, cleaning, maintenance, replacement of furnishings, service charges (if condo/hotel‑style), and insurance.

  • Furniture, décor, set‑up costs: one‑time (could be AED 20,000+ depending on unit size, luxury level). 

4. Best Areas & Property Types for Holiday Homes

Top Areas to Consider

According to research:

  • Areas like International City, Dubai Silicon Oasis, and Jumeirah Village Circle tend to deliver higher yields (~7‑9%) for apartments. 

  • For holiday homes (short‑term), popular tourist zones include: Business Bay (near Downtown), Palm Jumeirah, beachfront areas & high‑footfall zones. 

Which Unit Types Work?

  • Studios and 1‑bedroom apartments: lower ticket entry, easier to manage, good occupancy for solo/couple travellers.

  • 2‑bedrooms: good for small families or groups, higher nightly rates but higher purchase cost.

  • Townhouses/villas: yes, they can be converted into holiday homes — they cater to families, bigger groups, luxury market. But ROI might be a lower percentage‑wise because the purchase cost is much higher, and the operating cost is more intensive. For example: a 3‑bed villa in Palm Jumeirah 6.5% ROI. 

ROI Considerations By Property Type

  • Lower‑cost apartments in emerging areas may give higher percentage returns (yield), though absolute rental income may be lower.

  • Luxury villas in prime locations enjoy higher nightly rates but higher purchase cost, higher service/maintenance cost, and perhaps slightly lower yield %.

  • Short‑term holiday home yields may exceed long‑term rental yields if occupancy and pricing are optimised.

5. Process Overview: From Purchase to Listing

  1. Purchase a suitable property (freehold area, permitted for holiday homes or short‑term rental — check building rules)

  2. Get all relevant approvals and NOC from the building/association that allows short‑term lease.

  3. Register/license with DET via the holiday‑homes portal.

  4. Furnish & equip the unit to guest standard (furniture, appliances, décor, linens, WiFi, etc)

  5. Classify unit (Standard/Deluxe), set up pricing and listing on platforms, or engage a management company.

  6. List the property, manage bookings, guest turnover, cleaning, maintenance, and guest services.

  7. Monitor cost vs revenue, optimise occupancy & nightly rate, manage guest reviews, maintain standards.

  8. Renew permit annually, pay required fees, and stay compliant with regulations.

6. Risks & Things to Watch

  • Oversupply in certain areas: more competition lowers nightly rates/occupancy.

  • Seasonality: visitor demand may vary by time of year.

  • Regulatory risk: laws & fees may change.

  • Service charges/building rules: Many condo buildings may restrict short‑term rentals or have high service charges.

  • Higher wear & tear: more turnover means more maintenance cost.

  • Rate pressure: to maintain high occupancy, may need to price lower.

  • Entry cost: purchase price + set‑up + licensing + ongoing costs — must be factored in.

Whether you're a first-time investor or a seasoned property owner, the short-term rental market in Dubai offers unmatched potential for strong returns and flexible income. But success in this space requires more than just a listing. 

Looking for the best areas to invest in Dubai? Get in touch with our expert team today for a free consultation.

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