How to list your home on Airbnb

Property owners must get a permit, pay a Tourism Dirham Fee and insurance, and furnish the unit

There are no initial fees for property owners to list on Airbnb or any other platform. The owner pays Airbnb for each reservation – 15 per cent of the total. Getty
Powered by automated translation

For the past three years, Thea Myhrvold, the 31-year-old Norwegian founder of a technology company, has been listing the apartment she owns in Dubai's Jumeirah Beach Residence as a holiday home. She considers it a great option to earn additional income because she travels frequently for work and the apartment is often empty.

“Short-term rentals cover all the running costs for the apartment, such as Dewa and service charges, and provide positive return on investment. It is a great option when I am travelling or when I am not using my apartment,” says Ms Myhrvold, who did not want to disclose how much she charges for the property.

She uses the services of an Airbnb management company, which charges a 17 per cent fee and takes care of everything to do with the property, including advertising, guest check-in and checkout, cleaning and paperwork.

Renting out the apartment as a holiday property gives Ms Myhrvold the flexibility and freedom to use it when she wants. With a long-term tenant, you may get stuck because of the regulations, she says.

Signing up with a holiday home management agency takes the hassle out of listing a property on Airbnb and similar platforms. “I would not have done it otherwise,” she says.

Before listing a property on Airbnb or another online platform for short holiday lets, homeowners must first apply for a licence from the Department of Tourism and Commerce Marketing, known as Dubai Tourism. In Abu Dhabi, homeowners can apply for a licence through the Department of Culture and Tourism.

Homeowners can either apply for the licence themselves or get licensed through a holiday home company, which is a cheaper option, according to Anna Skigin, co-founder of Airbnb management company Frank Porter.

The licensing fee via a holiday-home company costs Dh370 to Dh1,200 a year for units ranging from a studio to a four-bedroom apartment. The property needs to be fully furnished with all utilities connected, such as Dewa and internet, Ms Skigin says.

Short-term lets cover all the running costs for the apartment, such as Dewa and service charges, and provide positive return on investment
Thea Myhrvold, property owner

“Tenants can list as well but only with the permission of the owner. The owner needs to sign a no-objection certificate for DTCM, allowing the tenant to short-let their unit,” she adds.

Homeowners are also required to pay a Tourism Dirham Fee when guests stay, which is Dh10 to Dh15 per night for each room. This is paid directly to the DTCM on a monthly basis. The holiday-home operator would usually cover this cost, Ms Skigin says.

In addition, the owner must have insurance on the property and a 24-hour service team. One major cost hosts need to be aware of is cleaning and sanitisation, which has to take place after every checkout. Hosts should also get the furniture shampooed every few weeks, according to Vinayak Mahtani, chief executive of bnbme Holiday Homes.

Other costs for owners include photography, guest amenities, maintenance and the day-to-day management of the property, he adds.

“From an Airbnb perspective, there are not many requirements apart from the basics needed to run any home. It needs to be well-furnished and have the basic amenities; you need to deliver on what you promise,” Mr Mahtani says. “However, keep in mind the UAE rules and regulations are different and have higher standards than Airbnb’s minimum requirements.”

UAE law, for instance, does not permit shared accommodation, so it is not possible to get a unit permit for renting out a single room on Airbnb and similar platforms.

Dubai Tourism also specifies a list of more than 50 items – more than Airbnb – that must be in the apartment, such as safes, kettles, a certain height for the mattress and number of towels per guest, Mr Mahtani says.

“There is a list of items that the property needs to have to be compliant with DTCM. Some of the items include TV, kettle, bedside tables and curtains. The full list can be found on the DTCM website,” according to Ms Skigin.

“Basically, the property needs to be fully furnished and ready for guests. Once the property is licensed, the licence needs to be renewed on a yearly basis. Every property also needs to be insured, as per the government regulations,” she adds.

Average pricing for a one-bedroom apartment can range from Dh350 during the summer all the way up to Dh1,000 during season times
Vinayak Mahtani, chief executive of bnbme Holiday Homes

Unless it is mentioned in the sales and purchase agreement, building management companies cannot prevent owners from offering short-term rentals so long as they have followed the DTCM's guidelines, the holiday home operators say.

In February, a survey conducted by short-term property management platform Guesty found that an overwhelming majority of respondents – 83 per cent – had embraced short-term holiday rentals and did not plan to book traditional hotel stays once the pandemic subsides. The survey polled 523 property management companies and hosts, investors and members of the hospitality sector in North America, Europe, Asia-Pacific, South America, Africa and the Middle East.

Ms Myhrvold is counting on the build-up to Expo 2020 Dubai to attract more tourists to the UAE this year, which she believes should benefit the short-term rental market.

She recommends that those considering renting their properties on a short-term basis use storage space for their personal belongings.

“I kept all my personal items in a store unit next door. One of the biggest fears for people renting out units short-term is their personal items. Storage is relatively cheap in the UAE, so having a simple storage unit gives you peace of mind. Or find some areas at home that you can lock to keep private things separate,” Ms Myhrvold adds.

Ali Reza, managing director of Credo Investments, a property developer in Dubai, has been using an Airbnb management company to lease about 36 units on a short-term basis on behalf of his company for nearly two years. Mr Reza’s family has also been using a holiday-home operator for the past year to lease personal properties in Dubai Marina and Downtown Dubai for the short term.

Mr Reza has used Airbnb, Agoda and other short-let operators for family holidays in different destinations. When the Airbnb concept came to Dubai, he was keen to check the yields available for short-term lets and initially listed a few units his company owned on the platforms. After they performed well, he listed more of his company's properties on Airbnb and similar portals, he says, without disclosing how much he charges for the properties.

“Our current short-term rental management company offers good service, good returns and provided high occupancy even during Covid-19. We have been associated with them for about 18 months,” the 45-year-old Pakistani says.

He believes short-term lets are a great option for property owners in the current market as they help to achieve better returns than traditional, long-term rental contracts, especially with the upcoming Expo 2020 Dubai expected to attract hundreds of thousands of visitors to the UAE who will need temporary accommodation.

The developer is now planning to offer a further 80 apartments in one of its new, fully furnished projects in Dubai South on a short-term basis.

“Short-term rentals offer an owner flexibility if they wish to sell the property. I can serve a short notice to the tenant to vacate the property whereas with a long-term let, the notice needs to be served a year ahead as per Real Estate Regulatory Agency guidelines,” he adds.

However, the disadvantage of short-term lets is that your apartment needs more maintenance because the turnover is considerably higher. But not all buildings in the UAE encourage short-term lets, he says.

Owners need to ensure that their property yields good returns, enjoys high occupancy and is well-maintained during a short-term let, Mr Reza says.

“Every area in Dubai offers a different rate of return,” he adds.

“You may be able to get higher returns in certain communities when compared to others. For instance, if you invest in Downtown Dubai, the price per square foot is high and the rents have fallen over the preceding 12 months during Covid-19. So, although you will benefit from good capital appreciation in the current market, your return on annual rental contracts will be lower than short-term lets, making the latter more attractive at present.”

The Airbnb management company notifies Mr Reza every month on the near-term price outlook for the property. Typically, Eid, public holidays, holiday seasons such as Christmas and the first quarter of every year are good months for short-term lets.

“Although summer is off-peak season, tourists from the West love the Dubai summer, so there is good occupancy. Short-term lets also attract big families because hotel room rates are higher in comparison,” according to Mr Reza.

Short-term rentals offer an owner flexibility if they wish to sell the property
Ali Reza, Dubai property owner

Short-term lets also benefited from residents taking staycations and opting for monthly rentals because of last year's Covid-19-induced job uncertainty, he adds.

This resulted in many families in the UAE switching from annual rental agreements to short-term lets to capitalise on the flexibility they offer, creating a win-win arrangement for owners who were struggling to lease their properties amid travel restrictions during the height of the pandemic.

There are no initial fees for property owners to list on Airbnb or similar platforms. However, homeowners pay Airbnb for each reservation – 15 per cent of the total. This fee is taken automatically by Airbnb and the homeowner receives the net amount, Ms Skigin of Frank Porter says.

The landlord can pay between 15 to 25 per cent, depending on which digital platform the guest uses to book, Mr Mahtani says.

All popular areas in Dubai deliver the best returns through short-term rentals, he says.

“Average pricing for a one-bedroom apartment can range from Dh350 during the summer all the way up to Dh1,000 during peak-season times. Our investors can earn between 12 per cent and 20 per cent yield on the property per annum.”

Some of the highest prices for short-term lets are in City Walk, Downtown Dubai, Dubai Marina and Palm Jumeirah, according to Ms Skigin.

“As an example – a three-bedroom apartment in City Walk in peak season is Dh2,000 per night and Dh900 per night during the off-peak season. A one-bedroom apartment in Dubai Marina in peak season is Dh650 per night and Dh300 per night during the off-peak season,” she says.

To become a Superhost on Airbnb, owners need to achieve a minimum guest rating of 4.8 and have fewer than 1 per cent in cancellations, Mr Mahtani says. In addition, they need to respond to guests in a certain amount of time and reach a certain number of reservations in the past year, he says.

“The majority of Airbnb hosts are UAE residents, who rent out their second, third or fourth home. Then we have ex-residents who left Dubai and are renting out their home with the option to use it when they come back, and investors who are buying properties to rent them short term,” Ms Skigin says.

Updated: July 22, 2021, 5:00 AM