Let’s Talk about Benefits: Daily VS Long-Term Rental of Apartments in Dubai

5:20 pm  |  28.08.2023

Long-term and short-term contracts between the lessee and the lessor are concluded without third-party witnesses and guarantors. Let’s compare the advantages and disadvantages of daily and long-term rental apartments in Dubai.

One-Bedroom Apartments

Short-term leases offer higher DSA rates but carry certain risks. This rent depends on the seasonality – in summer the property is not in demand, accordingly, the investor’s profit is irregular. While long-term leases bring a slow but stable income.  In the article, we will analyze in detail how it works.

Who Rents an Apartment in Dubai

First of all, it is important to understand the segments of the audience that rent apartments. For example, short-term rentals are popular with tourists and businessmen who come to Dubai for work. Long-term apartments are in demand among those who are looking for consistency – families with and without children.

READ: Dubai, Abu Dhabi, or Ras Al Khaimah: The Best Option for Investing

Tourists. This is the largest segment in the market, their number varies from 5 to 17 million people a year. Amongst the sought-after accommodations for tourists are both high-end and budget-friendly options, available for stays ranging from a few days to a full year, all within popular tourist destinations. The demand for real estate among tourists is extremely unstable and depends on both the season and the international situation.

Expats. These are citizens of other countries who are moving to Dubai. Dubai Statistics Center reports that in 2023, Dubai’s population exceeded 3.5 million for the first time in history, and that number continues to grow. Dubai is chosen by businesses, families with children of all ages, and single people. This segment prefers large apartments in central, and business areas.

Comparison of Short-Term and Long-Term Leases

The UAE does not have an annual property tax, but there are annual fees for the maintenance of the complex in which the apartments are located. The fee is determined by the Dubai Land Department Index and ranges from AED 3 to AED 30 (from $0.8 to $8.2) per month per sq. m. The amount depends on the location of the complex, the floors, the availability of the balcony, and other factors. It includes cleaning and removal of garbage, maintenance of order, security, etc.

READ: Dubai Rental Contract Guide: Step-by-Step

The relationship between owner and lessee in long-term contracts is regulated by Law 26 of 2007. In addition to the Law, it is stated that property can be leased for at least a year. If you rent a property for a shorter term – the lease is considered short-term. In the case of a short-term lease, the owner must obtain a license for the activities of the hotel. 

Short-Term Rental: 

  • Apartments are rented from a few days to a year.
  • It is in demand among tourists.
  • Pay daily, weekly, or monthly.
  • Utility payments are paid by the owner.

Long-Term Lease:

  • Apartments are rented for a period of several days to a year.
  • It is in demand among families with children and among businessmen.
  • Payment by one or more cheques per year.
  • Utilities are paid by the tenant.

Long-Term Rental

Long-term rental – the most common and understandable type of rental in Dubai. More than 80% of Dubai’s population is expatriate, and most prefer apartments. 

READ: What is Interesting about Investing in Real Estate in the UAE: Process Features

There is an important condition for the tenant – he must have a resident visa. If you have applied for a visa, but it is not yet ready – as supporting documents must provide a visa application and Emirates ID. 


  • Stability. The contract, as a rule, is concluded for a year or several years – it is not necessary every time to look for new tenants.
  • Associated costs are lower. Utilities and municipal fees are paid by the lessee.


  • Yield is lower. Profit from long-term leases varies from 4.3% to 8.4% per annum.  Law 26 of 2007 prohibits changing the amount of rent within two years from the date of the initial contract.
  • Careful selection of tenants. When concluding a long-term contract, the owners carefully select the tenants in order to further reduce the risks and additional costs for repair and restoration of furniture if you rent furnished. 

The lease must be registered in the Ejari system run by RERA – only in this case, the agreement will be valid.  When extending a contract, the owner is not entitled to increase the cost if 2 years have passed since the first contract was concluded.  To boost the rental price, it’s important to consider the RERA index, which provides the average rates for Dubai. 

Important info! The Dubai Land Department’s Rent Increase Calculator can calculate the market average cost of renting a house.

Short-Term Rental

Daily rent is popular among tourists who prefer to stay not in hotels but in apartments from the owner.


  • Higher yield. On average, payback exceeds the long-term by 1.5-2 times. 
  • Adapting the rental price. You can adjust the rental cost and adapt the prices to seasonality.
  • Opportunity to use for personal purposes. You can live on your property without being tied to a long-term contract.


  • Seasonality. The season peaks in October-March when Dubai is not too hot, and summer is considered unprofitable due to temperatures below 50 degrees Celsius. During this period, the rental price falls.  
  • Additional costs. These include utilities, internet, cleanliness, furniture, and plumbing repairs as required. 

The investor can expect an average of 5-8% of the annual net profit when renting a property in the long term. In the case of short-term leases, this number rises to 11-14%. 

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