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Hello, entrepreneurs!
It is my great wish today to detail what it was like setting up an Airbnb business in Dubai. Having been in the game for quite a while now, I have come to understand how to do business in this market in a better way. So come grab your cup of coffee and let us lose ourselves in the thrill of short-term rentals in one of the thriving metropolises today!
Legal Requirements: Dotting Your I's and Crossing Your T's
Sure, and for those who may be willing to skip the boring part, we call that the legal requirements. Believe me, I have once fallen for the game, and paying attention to this required step will certainly minimize the struggle in the worst cases.
Licensing and Permits: Your Golden Ticket
Firstly, let me understand this - you will have to understand the Dubai Tourism Authority a little. These people are the ones responsible for granting holiday home licenses. I recall while applying for a holiday home license for the first time, I was nervous, but in fact, it is a very simple procedure.
You should:
- Register the company in the Ministry of Economic Development
- Gain permission for commercial activity from the Dubai Tourism Authority
- Acquire a trade license
Pro Tip: Ensure your property complies with all the necessary requirements before submission of the application. I was so impressed by this and ended up rushing to alter some of the modifications on my apartment!
Follow the Guidelines Stipulated on the Short-Term Rental Regulations
Each location is different, and so Dubai has its own in terms of short-term rentals. Play by the book; it is not all rosy, as Dubai Land Department and the Registrar of Real Estate and Real Estate Agency (RERA) are the two key players in the game. Some of the highlights include:
- Registration of the property is a must with RERA
- You have to take precautions regarding specific building safety
- Also, like hospitality, there are rules regarding the minimum stay policy (in most cases seven days, but it is not constant)
This one time, a guest inquired if they could stay for just two nights, and I said no. It was hard and unfair, but I guess common sense got to prevail at all times.
Legal Documentation: They Shall Sign and Sign and Sign
Reach for your stapler, you are in for some paperwork! You will need:
- Your current and valid passport and visa
- Ownership of the property or no objection certificate (NOC) from the landlord
- Ejari (tenancy contract) registration
- Dubai Municipality approval
I have put together all these papers in one file so they are all together. This has saved me more times than I care to remember and certainly during inspections.
Market Analysis: Know Your Playground
Before you jump in, it is important to learn the Dubai market. I can say, and with positive results, that the prospective purchase was preceded by several weeks of studying the market.
Best Locations for Airbnb in Dubai
I’d say some of the favorite locations for Airbnb in Dubai are:
- Dubai Marina: for the beaches and nightlife
- Downtown Dubai: for that Burj Khalifa view
- Palm Jumeirah: for those who crave the good life
So it began with a little bit of a studio in the Dubai marina which has been constantly getting bookings, the place is a nice catch for tourists.
Market Trends
Pay attention to:
- Calendar effects (you can trust me, summers are quite slow)
- Major events such as Expo 2020 (why has it been a good thing for the organizers)
- New developments and attractions
I mainly use AirDNA to manage market trends. For the better, it definitely altered my prices.
Competitive Analysis
Do not make the mistake of ignoring your competitors. Naturally, I consider other Airbnbs in the vicinity, asking myself:
- What amenities they offer
- Pricing strategy adopted
- Occupancy rates
This keeps me in check with the competition and helps me progress with my offerings as well.
Stages of Launching Vacation Business on Airbnb
This is the last point and it can actually be dubbed fun – launching your business finally!
Cost Incurred and Budget Creation
Somehow, be ready for some operational costs to be incurred at first. When I was starting, I thought that the amount of money I was going to invest was way lower than the actual figure. Here is a rough approximate:
- Property purchase or even the very cost of renting it out
- Purchasing as well as installation of furniture and decorative items
- Purchasing kitchen appliances and gadgets for entertainment
- Legal assistance like licensing and legal representation
- Expending on the promotion process of a new business entity
I would advise you to have a cushion of at least 20% more than what you expect to spend. Believe me; unforeseen costs are forever there!
Property Selection and Acquisition
The most important and probably the most challenging of all is the selection of a property itself. Points to consider include:
- Accessibility (how far it is from the most visited places, public vehicles, etc.)
- The dimension and the plan, the building
- Possibility of constant high demand
I took a few months finding a perfect property to buy. It was very tiring but eventually very rewarding.
Setting Up Your Property
This is where you can let your creativity shine!
Closer to the core:
- Cozy beds (your guests will appreciate it)
- Nice kitchen
- Whatever there is, speedy Wi-Fi is needed in today’s world
- Local traces (Girl, what’s not to love when you can embellish with some Arabic decor)
Do not ignore those ‘Instagrammable’ places. Some background for photos can translate into some very positive reviews and free advertising!
Listing Your Property on Airbnb
Creating an Airbnb listing has to be considered some form of creative art. Here’s what worked for me:
- Quality images (I had to engage a photographer for this exercise)
- Stating a general overview of the property and being truthful about it
- Listing house rules at the beginning of the property description
- Reasonable rates (more on this later)
I cannot tell how many times I had to refine my listing for days on end only to have the bookings roll in like an avalanche in my first month.
Property Management Tips
Managing your Airbnb can, in fact, be like a full-time job. Here’s how I do it:
- Maintenance and Housekeeping
- Periodic thorough cleans (I do this between every guest)
- Quick action to attend to maintenance (I’ve got a handyman on quick dial)
- Replenishing of supplies (e.g. toilet paper, soap, and so on)
I recall one incident where a guest cursed at me for a dripping faucet at two in the morning. I have since then always had someone to call for instance maintenance—yes, I mean it; 24/7.
- Communication is key! I make sure to:
- Get back to inquiries without delays
- Give step-by-step check-in guidelines
- Answer questions during the stay if needed
- Get back after leaving for a chance to receive feedback
With regards to messages, I follow the law of the land and obey the Booking.com application for that is a money-saver!
Utilizing Property Management Services
Assuming you're similar to me, and you manage three or more properties, think about employing a property management service. They may take care of:
- Contacting the guests
- Upkeep and housekeeping units
- Check-in and check-out
I have only moved to an apartment management service with my second apartment and every dirham has been worth it.
Pricing Strategies
The price can make – or kill your business activity in Airbnb. Here is how I handled this situation:
Competitive Pricing Analysis
I look for attractive lodgings in my locality, taking note of the amounts they are being charged. In this one, I must say that PriceLabs has really helped.
Price Adjustments Based on Seasons
In terms of tourism, Dubai has well-defined seasons. I revise my prices according to:
- The peak season (October to April)
- The off-peak season (May to September)
- Holidays (New Year’s Eve, Eid, etc.) and other special occasions.
I remember in my first Ramadan, all my prices were the same and most of the rooms were empty. I learned my lesson!
Value-Added Services
To enable me to charge higher rates, I provide:
- Pick-up services from the airport
- Welcome packages with some local snacks and establishments
- Promotions on extended stays
These little extras have enabled me to keep the rates at a higher level as well as having satisfied customers.
Marketing Strategies
There is a necessity to market oneself due to the increased competition in the Dubai market.
Creating an Attractive Airbnb Profile
Your Airbnb profile is your storefront. Make it shine with:
- A friendly and enticing Airbnb photo
- A detailed Host Bio (I love Dubai and his tips about it are the host’s tips)
- Prompt responses to messages to increase ranking
Utilizing Social Media
I promote my property via Instagram, as well as other guests, such as their experiences. It’s been useful in reaching out to the millennials and Gen Z.
Leveraging Online Travel Agencies
Do not put all your eggs in the Airbnb basket. I also list on:
- Booking.com
- Vrbo
- Local Dubai rental sites
This has enabled me to expand my audience and lessened my dependence on one platform.
Real Estate Investment in Dubai: Expectations vs. Reality
Working with an Airbnb in Dubai has been nothing short of amazing. Some of the best parts:
- High Rental Income: My revenue during peak seasons has been exceedingly better than what long-term leases have to offer.
- Flexibility: My favorite thing about renting is the option of staying in my property when it's unoccupied. It's great for family visits!
- Cultural Exchange: The aspect of socializing with people of every nationality has been the most enjoyable. Guests have helped me gain friends and even contacts in business.
Challenges to Watch Out For
Foolproof it's not. Here are some of the challenges I have faced:
- Regulatory Changes: Regulations for short-term rentals in Dubai may be amended, hence you need information at hand and be prepared to change.
- Managing Occupancy Rates: Being in such locations during low seasons can be hard. I have mastered the art of planning for these times and channel them to the improvement of the property.
- Handling Guest Issues: There are noisy guests or damages to the property and so on, these are just some of the challenges you should be ready to face forever. I always prepare for the worst.
Success Stories
While living in Dubai, I bumped into awesome and amazing hosts on Airbnb. Let me share a couple of success stories:
Sarah's Luxury Penthouse
For Sarah, there was one luxury penthouse located in Dubai Marina. She was painstaking with every term connected with the guest and offered them services that ensured she got only 5-star reviews. She has now five properties under lease management and has quit her normal job!
Mohammed's Cultural Experience
Mohammed provides a different type of accommodation – a traditional Arab house in Al Fahidi. Because of this, he is receiving high revenue by charging more as he has forged for himself a market that offers cultural experience.
The common lessons learned from these success stories:
- Learn what makes you special
- Focus on customer satisfaction
- Accept changes and expand your vision
Wrapping It Up
Creating an Airbnb rental business in Dubai was among the most pleasant and fulfilling things I have experienced in life. There are challenges in establishing the business, but with adequate preparations, the proper mentality, and a sprinkle of the ‘Dubai’ magic, it can be an amazing adventure.
Consider this: overnight success is a myth. It took me approximately eight months of trying, learning, and tinkering before I saw any progress. However, at this moment, sitting on my balcony viewing Dubai’s skyline, gabbing with visitors from around the globe, I can say thank you for everything.
So, how would you like to spend time on Airbnb in Dubai? Believe me, you will not be able to pass up this ride.
If you have any concerns, please don’t hesitate to contact me. I would be more than happy to assist other business people make sense of the thrilling Saudi Arabian Airbnbs. Wishing you all the best – may your days be booked and reviews be glowing five stars!