Best Short-Term Rental Model for Dubai Landlords

Dubai’s short-term rental market is growing quickly. Every year, millions of visitors come to the city, and more people want flexible places to stay. Many landlords are finding that turning an apartment or villa into a holiday home can be a smart investment.

But here’s the catch: success here is not just about the property itself, it’s also about how you run it. The way you set up, manage, and make money from your property is what separates steady profits from taking on too much risk.

Three main ways of doing business are common in Dubai: master lease, rental arbitrage, and management. Each has its own good points, downsides, and real-life results. Landlords often expect certain things from these options, but what actually happens can be very different once you consider how the market works and the rules involved.

Let’s look at each model one by one, show what you might expect compared to what really happens, and help you choose what works best for you.

Expectation 1: A Master Lease Guarantees Easy, Risk-Free Income

With a master lease, you rent your property to an operator for a set monthly fee. It sounds ideal: you get steady rent, and the operator handles guests, cleaning, and bookings.

In reality, you do get steady income, but you lose out if the market gets better. For example, if your Dubai Marina apartment could make 25% more money during busy times, that extra money goes to the operator, not you. You also have to count on the operator to pay you on time. If they have money problems or stop paying, your income is no longer certain.

How to make it work:

→ Only consider a master lease with operators that are licensed, financially stable, and transparent.
→ Work out the details for regular check-ins, who takes care of repairs, and how to end the agreement.
→ Keep in mind that choosing this option means trading some possible extra profit for greater predictability.

This approach is a good fit for landlords who prefer stability instead of rapid growth, but it is not as hands-off or risk-free as some people think.

Expectation 2: Rental Arbitrage Maximizes Returns Without Risk

Rental arbitrage is often seen as a business idea that is halfway between owning a property and just renting one. Someone rents your place at the normal price, then rents it out for short stays and keeps the extra money they make from charging more for short-term guests.

Reality:

The main benefits go to the operator, not the landlord. Arbitrage is popular with operators because it lets them manage more properties without having to own them. For landlords, though, it can lead to different goals. The operator might focus on making as much money as possible in the short term, which can sometimes mean not taking good care of the property over time.

There are also strict rules. In Dubai, holiday homes must have a license from the Department of Economy and Tourism (DET). If the operator breaks any rules, the property owner can still get in trouble.

How to make it work:

→ If you are thinking about rental arbitrage, only work with people you trust who follow the rules and have good practices.
→ Make sure the lease clearly says who is responsible for getting licenses, taking care of the property, and having insurance.
→ Understand that even though it can work, landlords usually face more problems than benefits.

Rental arbitrage works better for people running the rentals, not for the owners. For landlords, it can cause extra problems.

Expectation 3: Management Is Expensive and Complicated

Many landlords worry about giving a management company some of their money, thinking it will lower their profits. In this arrangement, you still own the property and keep your money, while an expert handles the daily tasks for a fee, usually 15% to 30% of the total rent collected.

Reality:

In practice, the management model makes sure everyone wants the property to do well. When your property makes more money, your manager does too. You also stay in charge, unlike with some other deals where you give up control. You decide how your property is managed, while experts help it do as well as possible.

Management isn’t an added cost, it’s a performance multiplier. Reach out to us today to take care of your apartment. With the right partner, your property benefits from:

→ We take care of all the paperwork and rules from start to finish.
→ We set up and photograph your property to help get more bookings.
→ We list your property on Airbnb, Booking.com, Vrbo, and other sites.
→ We update your prices every day depending on how many people want to book.
→ We answer guest messages all day and night and always make sure everything is running smoothly.

How to make it work:

→ Choose a partner who has done good work before, is open about what they do, and gives you clear updates.
→ Make sure you agree on your goals. Some owners want to earn as much money as possible right away, while others care more about the property being worth more in the future.
→ Think of management fees as money you spend to make more profit overall, not just as an extra expense.

For most Dubai landlords, this is the model that balances control, revenue, and peace of mind.

Comparing the Three Models Side by Side

To make the differences clearer, let’s compare:

→ Master Lease: Steady and reliable, but you cannot earn more than a set amount. Good for owners who do not like taking risks.
→ Rental Arbitrage: The operator is in charge, owners and operators have different goals, and it can be risky for owners.
→ Management: Everyone wins together, owners and managers have the same goals, and the property becomes more valuable over time.

The Costs Landlords Often Overlook

Regardless of model, landlords must factor in:

→ DET license fees (about AED 300 per bedroom, plus the cost of getting the required certificates).
→ Tourism Dirham fee (AED 10–15 per bedroom per night, collected from guests).
→ Staging and furnishings, refreshed every few years.
→ Operational costs such as cleaning, linens, and maintenance.
→ Fees charged by booking websites and payment services.
→ Insurance made for vacation homes.

A good management company will handle all of these costs smoothly, so there are fewer unexpected expenses.

What Landlords Are Really Searching For

When we look at what property owners are Googling, it comes down to a few key questions:

→ “Is short-term rental profitable in Dubai?”
→ “What’s the difference between rental arbitrage and management?”
→ “Which model is best for holiday homes in Dubai?”
→ “Do I need a license to run a holiday home?”

This article will answer those questions in a simple way, because landlords who understand more can make better choices.

Final Thoughts: Choose the Model That Aligns With Your Goals

Owning a holiday home in Dubai can be very rewarding, but how you rent it out is important. If you want steady income and are not looking for the highest profits, a master lease could be right for you. If you want to lower risk and make the most money from your property, rental arbitrage is not the best choice. If you want a good mix of control, earnings, and a professional way to manage your property, management is the best option.

At One Perfect Stay, we support the management model because it gives landlords what they really want: clear information, good results, and protection for their property. We handle the daily tasks, follow the rules, and make sure guests are happy, while you keep ownership, earnings, and peace of mind.

Ready to unlock the true potential of your property?

Let OPS help you choose the right rental model, stay compliant, and maximize returns. Book your free consultation today!