Holiday home or long lease: the nightly rate that decides it.
Short letting earns more per night and costs more to run. Here is what comes off the top, what a holiday home has to earn to beat a twelve-month lease, and the conditions under which it does.
Updated
A Dubai holiday home pays a 7% municipality fee on revenue, a permit from the Department of Economy and Tourism, and usually an operator fee of 15 to 25%, and it carries the utilities, cleaning and furniture a long tenant never would. With a 20% operator it keeps 73% of revenue before those running costs. To beat a lease at AED 120,000, it has to take about AED 164,384 a year plus running costs. Short letting wins in buildings that allow it, with strong winter demand, where that bar clears with room to spare. Mulki shows the true long-lease figure for your unit, after service charges and voids, so you compare against what the lease really pays.
In short
Every dirham a guest pays loses 27% before running costs once a 20% operator and the 7% municipality fee are taken.
Occupancy decides it. Use a figure for the whole year, summer included.
Check the building rules first. Many communities ban short lets outright.
A long lease is less work and steadier, at the cost of the rent index and slow exits.
What comes off a short let
| Cost | Holiday home | Long lease |
|---|---|---|
| Permit | About AED 1,520, then about AED 370 per bedroom a year | None. Ejari, about AED 155 to 180 |
| Municipality fee | 7% of short-let revenue | None on rent |
| Tourism dirham | AED 10 to 20 per bedroom per night, collected from guests | None |
| Operator | 15 to 25% of revenue | Optional manager at 5 to 8% |
| Utilities and internet | Owner pays | Tenant pays |
| Cleaning and linen | Every stay | None |
| Furniture | Owner buys and replaces | Often let unfurnished |
Rates as used in our holiday home calculator, from the Department of Economy and Tourism and Dubai Municipality, read 27 October 2026. The tourism dirham varies with the unit's classification. Confirm current permit terms with the DET.
The break-even rate
Take a unit that would let for AED 120,000 a year on a twelve-month contract. Run as a holiday home with an operator at 20%, it keeps 73% of guest revenue after the operator and the municipality fee. Dividing the lease rent by 0.73 gives the revenue it needs just to draw level, before a single utility bill: AED 164,384.
| Occupancy across the year | Nights let | Average nightly rate |
|---|---|---|
| 60% | 219 | AED 751 |
| 70% | 255 | AED 643 |
| 80% | 292 | AED 563 |
Our arithmetic: break-even revenue divided by nights let. Assumes a 20% operator fee and the 7% municipality fee. Utilities, cleaning, furnishing and the permit come on top, so the real bar is higher.
When a holiday home wins
The building allows it and guests want it.
Short lets work in the places visitors book: near the beach, the Marina, Downtown and the big attractions. A unit in a community with a ban, or far from where tourists stay, has no business case however good the arithmetic looks.
The rate clears the bar in summer as well.
Dubai's season is lopsided. A unit full from November to March can sit half empty through July and August while the operator fee, the cooling and the permit carry on. An average that only holds in winter is the most common reason the numbers disappoint.
You value flexibility.
A holiday home can be emptied for a sale or your own use without a twelve-month notice. For an owner who expects to sell within a year or two, that option has a value the yield figure does not show.
You or your operator run it hard.
Reviews, pricing and turnover speed decide occupancy. A passive holiday home tends to underperform a lease. An actively run one in the right building is the case where short letting earns its extra work.
For your own unit, the holiday home calculator takes your lease rent, nightly rate, occupancy, operator fee and running costs and returns the occupancy at which short letting draws level. The rental yield guide sets out what a long lease returns after service charges, which is the figure a holiday home has to beat.
Whichever way you let, Mulki is where the comparison stays honest after the first year. It nets the Mollak service charge, maintenance and void months off the rent for each unit, so the long-lease figure a holiday home has to beat is the real one rather than the headline rent. For a long let it also flags the renewal date, the rent ceiling for that contract and the 90-day notice window, and books fixed-quote contractors with every visit logged against the unit. It is free for owners.
The break-even example uses a 20% operator fee and the 7% municipality fee only, and is illustrative. Permit fees and the tourism dirham are set by the Department of Economy and Tourism and change. Building rules can prohibit short lets regardless of the numbers. General information for property owners, not financial advice.
Questions
Is a holiday home more profitable than a long-term rental in Dubai?
What permit do I need to short let in Dubai?
What fees does a Dubai holiday home pay that a long let does not?
Can my building ban short lets?
Should I use a holiday home operator or run it myself?
Is a long lease safer than a holiday home?
Mulki shows what each unit earns after every cost, however you let it.
Notify me