Holiday Home vs Long Term Rental in Dubai: Which Makes More Money?

When deciding between a holiday home vs long term rental Dubai strategy, property owners must compare income potential, risk, and management effort. In 2026, many investors in Dubai Marina, Downtown, and Palm Jumeirah are switching to short-term rentals because returns often exceed traditional yearly leases. But which option truly delivers better ROI for your property?

In this guide, we break down real numbers, risks, and income comparisons to help you make the right decision.

Holiday Home vs Long Term Rental Dubai: Income Comparison

The biggest difference between a holiday home and long-term rental is how revenue is generated.

Long Term Rental Model

• Fixed 12-month tenancy contract
• Rent paid via cheques
• Stable income
• Limited upside during peak seasons

Average 1-bedroom in Dubai Marina:
AED 120,000 per year

Holiday Home (Short Term Rental) Model

• Nightly bookings via Airbnb & platforms
• Seasonal pricing flexibility
• Higher peak demand rates

Average 1-bedroom short-term rental in prime areas:
AED 220,000–260,000 gross annually

Even after management and operating expenses, net income can remain 20–30% higher than long-term rent in prime locations.

For full area breakdowns, see our guide on
👉 How Much Can You Earn from Airbnb in Dubai?

Pros and Cons of Long Term Rental in Dubai

Pros

• Predictable income
• Minimal involvement
• Lower operational complexity

Cons

• Lower ROI in tourist-heavy areas
• No surge pricing
• Locked rent for 12 months

For current yearly rental benchmarks, you can review market data on Property Finder.

Pros and Cons of Holiday Home Rental in Dubai

When comparing holiday home vs long term rental Dubai, short-term rentals offer flexibility and scalability.

Pros

• Higher income ceiling
• Seasonal rate increases
• Flexibility to use your property

Cons

• Requires active management
• Cleaning & guest turnover
• Licensing under Dubai holiday home regulations

You can review official holiday home licensing requirements through the Dubai Department of Economy and Tourism.

ROI Breakdown Example (1 Bedroom Apartment)

Rental Type	Annual Gross Income
Long Term	AED 120,000
Holiday Home	AED 240,000

Estimated expenses for short-term:

• Cleaning: AED 25,000
• Utilities: AED 12,000
• Maintenance: AED 10,000
• Management (20%): ~AED 48,000

Estimated net: AED 150,000+

This shows how holiday home vs long term rental Dubai comparisons often favor short-term rentals in prime communities.

When Long Term Rental Might Be Better

Long-term rental may be more suitable if:

• You want minimal volatility
• Your property is in a low-tourism area
• The building is older or less competitive
• You prefer completely passive income

When Holiday Home Rental Makes More Sense

Holiday homes typically outperform in:

• Dubai Marina
• Downtown Dubai
• Palm Jumeirah
• Business Bay
• JBR

Professional holiday home management in Dubai can significantly improve occupancy and pricing strategy.

Final Verdict: Holiday Home vs Long Term Rental Dubai

In prime areas, holiday homes often generate stronger ROI than long-term leasing. However, performance depends on location, furnishing quality, and pricing strategy.

Before switching, you should calculate projected income for your specific unit.

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