Debunking the “30% Greater Return Than a Traditional Annual Lease”

Every holiday home operator in Dubai has the number somewhere on their website. Thirty percent more than a long-term lease. Some say fifty. One says seventy. We had it on ours for years.

Here is the honest version, from ten years of running homes in this city.

The number is real. It is not the rule.

A well-placed apartment in a good year can earn 30% more short-term than it would on an annual lease. We have owners for whom it has happened. It is not a lie.

But it is not the common case, and it is not the reason to do this.

When it does happen, it is rarely because short-term letting is brilliant. It is because the long-term market is lagging. Annual rents in Dubai move in steps: a lease is signed, the rent is fixed for a year, and the RERA index holds increases down while the market underneath it moves. Nightly rates move every day. So in a year when the city is full and leases are still priced off last year, the gap opens, and you get your 30%. In a year when tourism softens — 2026 has been one — and annual rents have caught up, the gap closes, and short-term can earn the same as a lease or less.

The 30% is a description of a good year. It is being sold as a promise.

What the comparison usually leaves out

The brochure comparison is gross short-term revenue against the annual rent. That is not the comparison an owner should make.

Short-term revenue has costs that a lease does not. Platform commission of 15–18% on most bookings. Cleaning between stays. The DET permit. Utilities, which the tenant pays on a lease and you pay on a holiday home. Internet. Consumables. Furniture that wears three times faster. And the operator's fee, typically 15–20% of net.

By the time those are out, gross revenue of AED 100 lands in the owner's account as something like AED 55–65, depending on the building and the operator's model. A lease of AED 100 lands as AED 100 less service charge, which you pay either way.

So the honest arithmetic is: owner's net after everything, short-term, against annual rent, long-term. Run that and the 30% usually becomes single digits. In a strong winter it can still be well ahead. In a soft year it can be behind.

A real one, in round numbers

Take a one-bedroom in Dubai Marina of the kind we manage. Run as a holiday home across a full year, it nets its owner about AED 80,000 after platform fees, cleaning, permit, VAT and the management fee.

The same apartment is advertised for annual lease at AED 75,000 to 100,000 today. But a lease doesn't pay all twelve months either: there is the vacant period between tenants while the unit is listed and viewed, the agent's commission, the cheque that comes late. Net those out and a realistic annual lease on that apartment lands somewhere around the same AED 80,000.

So: level. Not 30% ahead, not behind. And that is a good building, well run, in a year the market was soft. In a strong winter the short-term number moves ahead; in a weak one it falls behind. The lease number barely moves. That is the real difference between the two, and it is a difference in volatility, not in return.

Now the other side of the ledger, which the yield comparison never shows. In that same year the owner used the apartment himself; it was professionally cleaned dozens of times; every tap, lock and appliance was checked between stays; the calendar was his to block whenever he wanted it; and when the market turned in the new year he was not locked into a rent fixed twelve months earlier. For a second-home owner, all of that is the point. For a pure investor, it is not, and they should probably lease.

What actually decides your return

Not the operator's headline. Four things.

The building. Two apartments of the same size in the same district can earn 40% apart. Guests pay for the view, the pool, the walk to the metro, the newness of the lift. Long-term tenants care about those things less. This is the biggest variable and the one nobody puts on a homepage.

Your entry price. If you bought at the top of the last cycle, no letting strategy rescues the yield. If you bought well, both strategies look good.

The year. Short-term is more volatile than a lease. That cuts both ways. If you need a fixed, predictable number, lease it. If you can live with a range, short-term gives you upside and use of your home.

Who runs it. Pricing discipline, minimum stays, guest vetting, and whether someone is checking the home between stays. This is where operators differ, and it is worth more than the headline percentage.

So should you do it?

If your only question is "which earns more", get both numbers for your specific building from someone who will show you the workings, and decide. Some years the answer is short-term. Some years it is a lease. Anyone who tells you it is always 30% ahead is not looking at your building.

If the question is "I own a home in Dubai that I use for part of the year, and I want it looked after and earning while I'm away", the comparison changes. A lease gives you a tenant and no access. Short-term gives you your home, kept ready, with income on the months you are not in it. That is a different product, and it is the one we actually sell.

We will tell you what your apartment is likely to earn, gross and net, and we will tell you if we think a lease would do better. Ask us.

Questions owners ask us

Do short-term rentals in Dubai earn 30% more than a long-term lease?

Sometimes, in a good year, for a well-placed apartment. It is not the typical result once costs are taken out, and it depends more on the building and the year than on the letting strategy.

Why is the 30% figure so common on operator websites?

It describes a strong year when annual rents have lagged the market. It is real, but it is a best case being presented as a baseline.

What costs does a short-term rental have that a lease does not?

Platform commission, cleaning, DET permit, utilities and internet, consumables, faster furniture wear, and the operator's management fee.

How should I compare the two properly?

Compare the owner's net short-term income after all costs with the annual rent for the same unit, for the same year. Ask the operator to show the workings for your building.

Is short-term letting right for a second home I use myself?

Usually yes. A lease gives you no access to your home; short-term letting keeps it available to you and earning when you are away.