Option 1: Long-term rental

How it works: you sign an annual tenancy contract with a tenant, register it in Ejari (Dubai's official tenancy registration system), and receive rent, traditionally in 1–4 cheques per year.

Key rules for landlords:

  • Ejari registration is mandatory; tenants need it for utilities and visas.
  • Rent increases are regulated. Dubai's rental index decides whether and by how much rent can go up at renewal — from 0% when the current rent is close to the market average, up to a maximum of 20% when it is far below. Since January 2025, DLD's Smart Rental Index also takes building classification (star rating) into account.
  • Notice: changes to rent or contract terms must be notified to the tenant at least 90 days before the contract ends.
  • Eviction is only possible on legal grounds (for example, non-payment, or the owner's own use or sale with formal notice periods).

Pros: predictable income, low management effort, tenant usually pays utilities. Cons: rent fixed for 12 months even if the market rises; increases limited by the index.

Option 2: Holiday home (short-term rental)

How it works: you rent the property by the night through platforms such as Airbnb or Booking.com, either yourself or through a licensed holiday-home operator.

Requirements (DET):

  • Holiday home permit from DET. Individual owners can register up to 8 properties; professional operators need a trade licence.
  • The building and your sale agreement must allow holiday homes — some buildings and communities prohibit them.
  • Fees: a one-off registration and inspection fee (about AED 1,840) and an annual permit fee per bedroom (published at AED 300 per bedroom plus AED 70 per unit).
  • Tourism Dirham: collected from guests per bedroom per night (AED 10–15) and paid to DET monthly.
  • Insurance covering guest damage, guest registration with DET, and a QR code displayed at the door.
  • Penalties for operating without a permit start from AED 5,000.

Pros: higher potential gross income in tourist areas (Downtown, Dubai Marina, JBR, Palm Jumeirah, Business Bay); flexibility to use the property yourself. Cons: furnishing costs, cleaning, utilities paid by you, operator fees (often 15–25% of revenue), seasonality and more work.

Long-term vs holiday home: comparison

Long-term Holiday home
Contract 12 months, Ejari Per night, DET permit
Income Stable Higher potential, seasonal
Who pays utilities Usually tenant Owner
Furnishing Optional Required
Management Low High (or operator fee)
Rent increases Limited by rental index Set by market each night
Best areas Communities with steady tenant demand Tourist and waterfront areas

How to calculate your real (net) rental yield

Gross yield = annual rent ÷ purchase price × 100. Net yield = (annual rent − service charges − management − maintenance − vacancy) ÷ total cost (price + buying fees) × 100.

Example: apartment bought for AED 1,500,000 (plus AED 95,000 fees), rented long-term for AED 110,000 a year

Item AED
Annual rent 110,000
Service charges (e.g. 900 sq ft × AED 18) −16,200
Management (5% of rent) −5,500
Maintenance reserve −3,000
One month vacancy −9,167
Net income ≈ 76,133
Gross yield (110,000 ÷ 1,500,000) 7.3%
Net yield (76,133 ÷ 1,595,000) ≈ 4.8%

The figures are illustrative. Service charges and rents vary widely by building — always check the actual numbers. Our investment calculator does this calculation for a specific property.

Taxes on rental income

Individuals do not pay UAE personal income tax on rent. Corporate tax at 9% can apply to companies and licensed business activities with taxable profit above AED 375,000. Your country of residence may tax income from Dubai property — check with a local tax advisor.

Tips to maximise rental returns

  • Compare net yields, not headline gross yields.
  • Check service charges before buying; they make a big difference in older or amenity-rich buildings.
  • Choose areas with steady demand and transport links; see our area guide.
  • For holiday homes, confirm the building allows them before you buy.
  • Use a licensed property manager if you live abroad.

Get a rental estimate

Ask an SPI Dubai advisor for a long-term and holiday-home rental estimate for a specific property or area, based on current market data. We usually reply within 10 minutes. Get advice.

This article is for general information only and is not financial, tax or legal advice. Rental rules, permit fees and market rents change; verify with DLD, RERA, DET or a qualified advisor. Yields shown are illustrative, not guaranteed.

Sources: Dubai Land Department — Smart Rental Index announcement (January 2025); Ejari (DLD); Department of Economy and Tourism holiday home requirements (as summarised by GuestReady, 2026); Khaleej Times on Dubai rental yields (16 February 2026); UAE Ministry of Finance (Corporate Tax).