Dubai
apartments for rent on Self-Catering
basis.
Part 1: Tips for Landlords…
Following my last article Tips
for tenants, in this issue I
would like to cover some interesting
guidelines for those Dubai landlords
adventuring into the Short-Term
Rental business.
It is a very common and old
practice, especially in the
Italian, Spanish or French Riviera
to rent out a personal property
as a holiday-home to tourists.
The short-term rental business
has proven pretty successful
in those countries with strong
tourism affluence and since
Dubai is working on becoming
an international holiday destination,
it is interesting to consider
this investment opportunity.
By renting out a property on
short-term basis a landlord
has the chance to use the property
for his/her own personal use,
generate a high return of investment
by letting it out to holidaymakers
and at the same time benefit
from the property value appreciation.
The short-term rental concept
could be applied anywhere in
the world but the real key to
its success lays in its implementation
within the local market in fact
any successful business idea
can be brought to Dubai and
prove a complete disaster, the
concept by itself is nothing
new and certainly not invented
in Dubai so the actual heart
of the business is not much
in the idea as it is in its
execution.
Having the idea and the product
(the property) is just about
10% of the business, what really
matters is the marketing which
I would value at 70% and the
actual daily running which could
be valued at 20%
Setting up an apartment for
the short-term rental requires
experience, interior designing
skills, attention to details
and plenty of time and resources
to follow up the actual furnishing
process, utilities connections,
daily running and marketing.
Some details are extremely important
and if overlooked, will compromise
the stay of your guests hence
it is essential to set up the
property with the guests needs
in mind rather than following
a questionable personal taste.
One detail that is consistently
overlooked is the actual efficiency
of the bedrooms curtains, which
in the majority of the cases
do not block the windows light
properly, this is usually due
to lack of experience or to
good bargain 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 when
you do have experience, knowledge
and passion 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 seems
A reasonable solution to this,
especially if you are handling
more then one property, is to
refer the entire marketing and
management to a professional
agent who for a fee (usually
20% of the rental) will take
the weight off your shoulders
with a smile.
In the current market a 5 stars
marina-view one bedroom apartment
in Dubai Marina Face 1 (where
all the cafs and restaurants
are) will rent for approx AED
95.000/- per year if unfurnished,
the same property can fetch
up to a AED 235.000/- a year
if rented out furnished on short-term
basis and after deducting the
20% agency commission plus about
AED 40.000/- for the 5 stars
furnishing and approx AED 8.000/-
a year for the utility bills,
this will live the owner with
a net AED 142.000/- (on occupancy
rate of 79%)
The numbers speak for themselves
however is important to remember
that where there is a good return
there is also a certain risk
and many will agree that the
most delicate figure of the
above calculation is the occupancy
rate which cannot be guaranteed
in any property short-term rental
management contract.
Keeping the above consideration
in mind, would you wish to engage
an agent for your short-term
rental requirements, it would
be wise to commit for an initial
trial period of maximum six
months, this period shall allow
you to gather enough details
and should give you a good idea
about the reliability and actual
potential of the agent/marketer
you are dealing with.
Would you rather get more hands-on
with the business, you could
opt for a non-exclusive marketing
agreement, also available in
the market and you will be able
to market your property through
other agent/marketers and potentially
increase your exposure however
this is not necessarily the
optimum solution in fact many
agents will give priority to
the properties of those clients
with whom they have contractually
committed with.
To browse our short term rental
properties Please select your
type:
The author is Alessandro D’Ubaldo,
Sales Manager at
Dubai Furnished Apartments
in Dubai, U.A.E.
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