September 20, 2023

Jamilia Ramazanova: From the landlord’s perspective, Dubai's high rental prices are not a bad thing

How can you maximize the income from your Dubai property investments? How can you save money as a tourist coming to Dubai for a vacation? Wait, how come these two questions even appear in the same paragraph? Well, they are actually opposite sides of the same coin. Sounds complicated? No worries, Jamilia Ramazanova, Managing Director of Mira Holiday Homes, will guide us through the ins and outs of Dubai’s rental market.

First of all, tell us a bit about your company.

Mira Holiday Homes takes property under management and rents it out on behalf of our clients. We’ve been on the market for quite a while and currently run more than 200 apartments in Dubai. Generally speaking, there are two types of rentals – long-term and short-term. With long-term, you can rent a property to one family and forget about it for a year. Short-term means the owner has to constantly monitor what is happening in their apartment and solve a lot of routine issues.

What are the advantages of short-term rentals for property owners?

If long-term rentals get the owner an income of 5-8% annually, short-term can result in 10-12%. With short-term rentals, you can stay in your own apartment when coming to Dubai, constantly check its condition, etc. With long-term, you will be able to get into your apartment only after a year, when the tenants move out. So, if you are planning to resell a property, you can’t even showcase it to potential buyers.

What is the advantage of renting an apartment over a hotel as a guest?

If you are a tourist, then renting an apartment can be a more convenient option, especially for families with children. You don't need to take several hotel rooms: apartments are usually more spacious and come equipped with everything necessary for a comfortable stay, including a kitchen. For a long stay, an apartment is much cheaper.

What’s special about Mira Holiday Homes?

From the landlord’s point of view, we offer a fairly low commission of 19%. The average for the current Dubai market is 25%. As for the guests — we do not charge for cleaning, and our concierges are in touch with customers 24/7. They can tell you about the area, help you order a taxi or point a way to the nearest grocery store. It’s almost the same service you get in a hotel. 

How do people become your clients?

Most of our landlords were the clients of Mira Real Estate at first. They bought a property and then continued their investment journey with us. Usually, our team steps in during the handover. The owners do not always come to Dubai. Instead, they often make an online power of attorney that allows us to get the keys on their behalf. The contract is also signed online. The owner has a personal online account to track all our activities in real time. We register the property with the Department of Economy and Tourism and get permission to rent it out. Then we do a photo session and post all the info on various rental portals, such as Booking, Airbnb, Expedia, Bayut, Dubizzle and Property Finder.

So, it is necessary to register an apartment with the Department of Tourism, right? Otherwise, you can’t rent it out?

Yes, otherwise renting out an apartment would be illegal. The owner is given a fairly short time to notify the authorities about the arrival of each guest. This is an everyday routine in the hospitality business worldwide. In fact, it is very difficult to rent out an apartment on your own. For example, if the reservation was confirmed late in the evening, you still need to contact the guest, send him the location, and give him the Wi-Fi password. In some residences, the elevator does not work without a card, so you need to go there with this card and hand it over to the guest. It’s a full-time job, no two ways about it.

Why are rental prices in Dubai so high?

Well, if you’re looking from the landlord’s perspective, it’s not a bad thing, right? And guests of the city always have a choice: prices vary significantly depending on the season. The same apartment can cost two times more during winter than in the warmer months. But this includes hotels, too, it’s a global game of supply and demand. And the demand during the tourist season is crazy.

If I’m a tourist, which areas would you recommend for renting?

It all depends on the budget, but it is better to go for areas with developed tourist infrastructure: JBR, Palm Jumeirah, Dubai Marina, Downtown, all usual suspects. You’ll spend more time actually being in places than going there. For a classical Dubai vacation, I strongly advise the apartments with beach access. Again, it would save you so much precious time. 

And where should I settle for a long time if I come to Dubai for work?

In this case, paying for a residence with beach access is impractical. You’ll have a busy schedule, and you won’t use it that much. Choose some more quiet and cheap neighbourhoods: a little additional driving minutes or a trip on public transport won’t hurt. Anyway, outside the tourist areas, the traffic is usually light. I’d personally start my search from JVC, JLT, or Al Jaddaf. The obvious destination for those working in the city centre is Business Bay, but the prices here would obviously be a bit higher.

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