Short Term Rentals VS Long Term Rentals | Dubai & Beyond

Updated: Jan 25

What is a short-term vacation rental?


Before anything else, let’s familiarise ourselves with the definition of a short-term rental.


A short-term rental (commonly referred to as a vacation rental), is the leasing out of a furnished property on a short-term basis. Depending on the owner, rental location and many other factors, these properties are rented by the week or by the night.

Many owners of short-term vacation rentals rent their property for the majority of the year when they are not using it themselves.


They have become a hugely popular alternative to hotels in the last 20 or so years, most notably with the surge of sharing economy websites such as HomeAway, Airbnb and Booking.com.


Advantages of short-term vacation rentals


While long-term rentals offer consistent income and are generally easier to manage, there are several advantages to consider a short-term rental instead:


1. Higher rental income potential

Not only can you set fluctuating rates depending on your area’s high and low season, but you can also set a minimum length of stay for your most popular times of year to ensure you receive maximum profits.


2. More flexibility

For owners who rent their properties short term, there is a lot more flexibility involved for you and yours. You can specifically block off calendar periods that you want to keep free for your personal use without inconveniencing anyone.


3. Less wear and tear

In general, vacation rental contract lengths range from a few days to a few weeks maximum. Receiving guests in short bursts like these ensure that guests are simply visiting your property, and so won’t be thinking about redecorating or rearranging furniture.

4. Tax breaks and deductions

Many vacation rental owners are entitled to certain tax breaks or even deductible property expenses because the property isn’t being let long term. Be sure to check your local authority’s rules and regulations on this.


5. Contribute to the sharing economy

We hear a lot these days about the sharing economy and its positive effects on wider society. By letting your property short term to vacationers, you’re showing that you’re an innovator who is helping contribute to this modern way of living and thinking.


6. Automate property management

Advancements in technology such as smart apps or smart locks, have made it easier to manage vacation rentals even if you don’t live nearby.


What is a long-term rental?

Unlike short-term vacation rentals, long-term accommodation typically refers to that which is leased for periods of one month or longer. In general, renters pay the homeowner each month and typically take care of other expenses such as utility bills.


Advantages of long-term rentals

There are certain advantages of investing in long-term properties; here are a few of the major advantages:


1. Consistent income

One of the key advantages of renting your property on a long-term basis is knowing that you have a monthly rental income that you can rely on. This can help take the pressure off new homeowners who have a lot of other expenses to worry about. Additionally, long-term renters are generally responsible for paying monthly and quarterly utility bills for electricity, gas, water and even the internet.


2. Easier to manage

Whether you choose to hire a property management company in Dubai or manage the property yourself, it will require less time than a short-term rental.


3. Less turnover

If you’re renting to long-term guests, you’ll find you’ll have less to worry about when it comes to administrative tasks such as paperwork, key handover, and even marketing. Once your renter signs the lease, you know how long (to a certain extent) you can expect them to stay. You only need to worry about filling the house again once you know it will be vacated.


4. There may be no need to furnish

Some (though not all) long-term guests come with their furniture in tow. This can make the decision easy if you’re thinking about leasing your unfurnished property. Not only will you have a guaranteed monthly rent payment coming in, but you also won’t need to fork out on new furnishings for your home.


6. You can charge a high-security deposit

If you’re worried about the finer details of renting, such as insurance, rental agreements and security deposits, then there’s no need to panic. For long-term rentals, you can usually charge quite a high-security deposit, which will be returned to the guest at the end of the tenancy unless in case of property damage. These deposits can give owners a lot of peace of mind when it comes to renting out their properties.