Adil Raza Khan | March 29, 2025
Dubai is one of the most lucrative places to invest in real estate. In fact, the city has one of the highest ROI in the world. Additionally, what makes it more attractive is the zero income tax on individual ownership. For properties owned by companies, taxes will only apply if the income is more than AED 375k.
Accordingly, this is why rental properties in Dubai offer an excellent opportunity to make money. It is considered a low risk investment opportunity with high rental yield potential. Plus, it can even be a profitable passive income if you partner with a trusted property management company.
At 5.75% gross rental yield in Q2 2024 alone, you can benefit from the thriving rental market in Dubai and start earning money from rental property Dubai. Overall, you have three main options if you want to make money through rental properties in Dubai. These are long-term lease, short-term lease, and joining a hotel rental pool.
Let’s discuss these three options in detail.
A long-term lease is a common and stable way to earn rental income in Dubai. As per Dubai’s law, only UAE residents and legal entities can rent these properties.
Moreover, the minimum lease term is at least a year. Any rental property Dubai that falls below those terms will be considered a short-term rental. Additionally, rental increases must follow the RERA rent index, which calculates acceptable increases depending on the market rates in the area. Following RERA guidelines, rental increases typically don’t exceed 5% yearly.
It is important to note that the contract between tenants and landlords are maintained and governed by Law No. 26 of 2007, or the Dubai Tenancy Law. Moreover, registering the rental contract with Ejari is a legal requirement under this law.
Additionally, the process is an initiative of the Real Estate Regulatory Agency (RERA) in Dubai. Its main purpose is to formalize rental agreements between the tenants and landlord. As much as you will be concerned with the registration process of rental property Dubai, termination of contracts is just as important.
For early termination of rental property Dubai, some things to keep in mind are:
Short-term rentals, on the other hand, is the second way to make money through rental properties in Dubai. It caters to the growing tourism and immigrants in Dubai. In our data, you can even earn from 10% to 20% ROI with short-term lease compared to long-term. In addition, if you own a property especially in prime locations, you can directly rent this out to tourists. You can also opt to partner with platforms to list your properties online.
Consequently, in order to pursue short-term rentals, landlords need a permit from the Department of Tourism and Commerce Marketing (DTCM), renewable every year, and with a maximum of 8 units.
There are associated obligations you need to take note of:
Additionally, short term rentals will also require the landlord to set up a bank account, partner with platforms to advertise the property, and handle daily operations such as bookings.
Another interesting way to make money through rental properties in Dubai is through a hotel rental pool. As it is a new way of renting out property in Dubai, it needs more elucidation as to how it works.
Generally, developers would sell branded residential units to investors. These units are often off-plan properties. Then, the residential units are leased back to the hotel to allow the hotel operators to rent them out to guests. The investors would earn a share of rental income Dubai while having a hotel manage their property.
The rental income Dubai is more competitive compared to global markets like New York at 6% returns on average. In Dubai, the returns typically start from 5% to 10% annually. However, these numbers can even reach great heights depending on the property’s location, type, and costs.
For instance, greater returns are generally found in prime locations like business districts, near tourist hotspots, and popular residential areas. Hence, renting out property in Dubai within these areas has consistently high rental rates. Additionally, short-term rentals can even have up to 15% to 20% ROI if you partner with a reliable property management company.
The general rental property in Dubai is divided into residential and commercial properties. Moreover, these different properties all answer to different guidelines, regulations, and varying ways of marketing. This is why the most recommended move for landlords when they’re renting out property in Dubai is to partner with a property management company.
APIL Properties, for example, specializes in all three options. We have a tailored management solution for long-term lease, short-term, and hotel pool.
For residential properties like apartments, villas, townhouses, and more, landlords can put them up for long-term or short-term leases. On the other hand, branded residential units in a hotel rental pool are offered mainly for short-term stays.
Meanwhile, commercial properties are typically leased to businesses on long-term contracts. The lease contracts for this type of property are more flexible than residential properties. In fact, the duration of commercial property lease typically ranges from 1 to 5 years.
Knowing how to make money with rental properties in Dubai will guarantee your success and long-term gains. While the process can be daunting, especially for first-time landlords, APIL Properties has an experienced team you can rely on.We have a deep understanding of what the landlords need to know before jumping into this journey.
In addition, we can guide you through the needed legal requirements and intricacies you need to understand. With only a 15% management fee, you are already adding value to your properties. Our client-centric approach can provide you with personalized advice and services on how to make money through rental properties in Dubai.
Yes. Rental property Dubai are low risk investments with guaranteed high returns.
You have three options on how to make money through rental properties in Dubai. This is through long-term leases, short-term leases, and hotel rental pooling.
Yes. Non residents can make money by renting our property in Dubai, but they will need a local bank account to receive rental payments.
To formalize your rental agreements, you need to register them with the Ejari system, which is backed by RERA. This will give you legal protection should there be disputes between properties.
The associated costs for rental properties in Dubai are maintenance costs and service fees. Dubai does not have a rental income tax, so landlords can enjoy most of their profits.
Landlords can typically earn a 5% to 10% ROI on average for rental property Dubai. However, with property management, short-term rentals can even reach 15% to 20% yearly.
Should I go for a ready property or an off-plan property?
Both options come with their own perks, risks, and potential rewards. Let's break it down, shall we?
So, one of the first questions an investor asks when entering the Dubai real estate—is: How best can I maximize my returns? You are most certainly not alone if you are choosing between investing in an off-plan property (the ones still under construction) and a ready property (the type already built).
Real estate is a dynamic field; thus, recognizing the difference between these two choices could either strengthen or devastate your investing plan. Let's look into the ROI comparison of off-plan vs. ready properties in Dubai closely to find which would be best for your investment portfolio.
With lots of data to support it, we will discuss everything from rental yields and capital appreciation to dangers and market circumstances.
Simply put, Ready properties—that is, the developments already built and ready for use or rent. These could be offices, villas, or apartments you could start renting out right away or move into right now.
The great advantage of purchasing a ready to move in properties in Dubai is not having to wait. From the location to the state of the property, you are precisely entering what you are getting into. For investors, who want to start making money right away, immediate rental revenue is quite beneficial.
Off-plan properties are ones still under development or have not yet reached ground-level breaking. Often sold before they are finished, these qualities make them more reasonably priced initially. Investing in a home at a reduced price allows you to start making money only once it is constructed.
The off-plan properties in Dubai mostly appeal to those looking for more capital appreciation. Once development is completed, the property is sold at a cheaper price, hence there is usually a chance for a notable rise in value—especially if the region grows or becomes more popular during the building period. Note that you can avail potential for appreciation of 10 to 15% during construction for every year until handover.
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The World Is Watching Dubai—Are You?
In 2025, Dubai is not just thriving—it’s leading. Dubai is enjoying a historic boom, shattering records and creating futures while property markets all around face instability. Once more, the city shows that it is a concept based on invention, endurance, and worldwide aspiration rather than merely another skyline. For investors, this is the time—not only a good time only if you look at real estate trends in Dubai.
Let us dive into why 2025 is the year you must invest in Dubai real estate!
