Riz Ahmed, CEO, SmartCrowd
The rise of holiday homes in Dubai has been grabbing plenty of headlines — and this is no passing trend. It’s the result of shifting economics, evolving regulation, and a deeper change in how property owners think about control, yield, and flexibility.
Traditionally, landlords in Dubai relied on long-term leases to generate steady income. The model was simple: sign a tenant, collect rent, and hope for minimal disruption.
But recent challenges have exposed the vulnerabilities of that approach. The rise of illegal partitions and unauthorised subletting has created serious safety concerns and left landlords with repair bills that can reach tens of thousands of dirhams.
Unfortunately, there are also multiple scams that involve agents and fake tenants. This not only leaves real tenants in difficult situations but also results in legal and financial complications for the landlords themselves.
Enforcement mechanisms have also weakened — bounced cheques are now decriminalised, making it harder to pursue defaulters. Defaults are becoming more common, and the eviction process is often lengthy and complex. Once a lease is signed, control is largely lost. You don’t know who’s living in the unit, how it’s being used, or whether it’s being structurally altered without permission.
This is why many landlords are rethinking the model.
Converting a property into a licensed holiday home or short-term rental isn’t just about chasing higher returns — it’s about protecting the asset. Under Dubai’s regulated short-stay framework, owners retain access, schedule inspections, and enforce guest limits. The property is maintained to a higher standard, and the risk of long-term damage or legal disputes is significantly reduced. That peace of mind, combined with the flexibility to sell or switch strategies, is a compelling proposition.
And the financial upside is real.
In high-demand areas like Downtown Dubai, Dubai Marina, Palm Jumeirah, and Jumeirah Village Circle (JVC), professionally managed holiday homes can outperform traditional leases on a net basis. The demand from tourists, business travellers, and regional visitors remains strong, and the regulatory environment is clear. Permits, inspections, and guest limits are well-defined by the Dubai Department of Economy & Tourism, giving owners a predictable and transparent operating framework.
There’s also a growing trend among expats who book short-term rentals for visiting family and friends. Whether it’s for a few days or several weeks, Airbnb-style accommodations offer flexibility and comfort without the commitment of long-term leases. This segment of demand is adding further momentum to the short-stay market.
Of course, running a successful holiday home isn’t as simple as listing it online. Guest turnover, cleaning schedules, marketing, and revenue optimisation require time and expertise. That’s where professional operators come in.
Companies like HAVN Lifestyle Getaways offer a full-service solution — handling compliance, guest screening, dynamic pricing, and maintenance — while giving owners peace of mind through structured oversight. For landlords who want real-time visibility into performance, platforms like the Hostaway app provide a centralised dashboard to track occupancy, booking channels, and monthly statements. Together, this ecosystem transforms short-term rentals from a logistical burden into a high-performing, hands-off investment.
Holiday homes also offer a distinct advantage when it comes to resale. Selling a property with a long-term tenant in place can be complicated. Current regulations require landlords to give tenants 12 months’ notice, which not only delays sales but also lowers the property’s appeal to end-users — many won’t buy if they can’t move in immediately.
Holiday homes avoid this issue. They can be sold “as is” (even fully furnished) with the flexibility to continue generating rental income or to allow an end-user to move in right away. This helps preserve — and even enhance — the property’s market value, making it a more attractive investment option.
Still, holiday homes aren’t the right fit for every property.
In purely residential communities, a stable long-term tenant may still be the better option. The savvy move is to evaluate location, building policy, and demand dynamics before deciding. At SmartCrowd, we help fractional investors do exactly that — guiding them to position each asset where it will perform best, whether that’s through short-stay income or long-term stability.
Beyond individual portfolios, there’s a broader benefit to this shift. The recent crackdown on illegal partitions isn’t just about landlord inconvenience — it’s about safety, livability, and raising the standard of Dubai’s rental stock. By moving units into the regulated short-term market with vetted operators, landlords are aligning with Dubai’s vision of a transparent, globally competitive property ecosystem. Licensed holiday homes provide traceability, accountability, and a better experience for both guests and owners.
This rise in holiday homes also reflects a growing appetite for turnkey, design-forward, move-in-ready properties. That’s part of the thinking behind our Flip model, which fractionalises high-end renovation projects. Investors co-own premium upgrades in prime communities and share in the resale gains, meeting the demand from buyers and renters who want quality without the wait. Whether held as a holiday home, rented out short-term, or sold, these assets are commanding a premium in today’s market.
Dubai’s appeal has always been built on more than just sunshine and tax efficiency — it’s beloved for the sheer choice it offers and agility. The holiday home surge captures both. Owners can enjoy their property when they want it, monetise it when they don’t, and pivot strategies as the market evolves.
