How to rent out an apartment in Dubai

How to rent out an apartment in Dubai

11.20.2022 (updated 03.22.2023)

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  • How to rent out an apartment in Dubai

The real estate market in Dubai offers many opportunities for overseas investors. One of the most popular options to save and grow your capital is to buy a home to rent out. Today you can purchase and rent out real estate in Dubai remotely. Specialty companies arrange the property management and ensure you have tenants. In addition, there are no taxes on personal income in the UAE, so the owner will be able to receive a net profit. Renting out villas and apartments in Dubai is a profitable, reliable and safe source of passive income. In this post, we will discuss issues that property owners may have when renting out their housing.


Short or long-term rentals

If you have bought an apartment in an off-plan project, and the building has already been handed over and you have the keys, next, you need to decide whether you want to rent out your property for the short or long term.

The average return on investment (ROI) for long-term rentals in Dubai is 5-8% per annum. For short-term leases, the ROI can reach 11-13%. However, each format has its own nuances.

According to senior real estate expert, Aram Grigoryan, “a lot depends on what kind of property you have and where it is located. An effective solution is to rent out a small studio apartment or one-bedroom apartment in developed areas with tourist attractions. To do this, you will need to register with the Dubai Department of Economy and Tourism (DET). Please note that in some projects, especially in buildings that are managed by hotel brands, there is a ban on short-term rentals”.

If the apartment is situated in a developing area, it is better to rent it out on a long-term basis. However, each case is different, so it is best to consult with your real estate agent who knows the local market well.

It is important that you only work with trustworthy companies and brokers that are certified and licensed by the Real Estate Regulatory Agency (RERA).

Consultants from top agencies will assist you, not only at the time of concluding a sale and purchase agreement but also during the construction of the project and when issuing keys. If you wish, you can easily rent out property without coming to Dubai.

Who can rent out property in Dubai for a year

In order to rent out a property for the long term, you need to follow a few steps. All properties for rent in Dubai must be approved by the Dubai Land Department (DLD). To accomplish this, you must submit the following documents to the DLD:

  • a copy of the passport of the owner/s;
  • document of ownership (Title Deed);
  • contract with a real estate agency (Listing Agreement).

Your agent will then list the property on a real estate platform. As Aram Grigoryan notes, the search for tenants can take from a couple of days to a month.

When a potential tenant is found, you then enter a Tenancy Contract for a period of one year. It is important that such a contract can be signed only with people living in the UAE with the status of a resident. It is best if your agency uses a single RERA lease agreement and a standardized appendix that sets out the rights and obligations of both parties.

For your rental contract to be legal, it must be registered in the Ejari system. This can be done in special multifunctional centres or online. The procedure itself is extremely simple and you can do it yourself or have your agent do it.

Payment methods

Payment is made by bank cheque. With your consent, the agent negotiates with the tenant for a certain number of payments per year – usually from one to four. The rent is divided by the number of these payments, and the tenant writes cheques, dated according to your agreement.

For example, you are renting out your property for 100,000 AED ($27,000) per year and agreed that the payment will be made quarterly. Accordingly, the tenant writes four cheques in the amount of 25,000 AED ($6,800) each and writes the date on the cheque. You will only be able to cash the cheque after this date has passed.

Is the tenant required to allow the owner into the apartment?

For as long as the tenant resides in your property, they have the right to deny you access to your apartment or villa. All exceptions must be specified in the contract.

How long does it take to notify a tenant of an eviction?

You can evict the tenant only by sending them a letter of non-renewal of the lease, one year before the expiration of the period specified in the contract. As Aram Grigoryan explains, “even if the contract expires, the resident has the exclusive right to extend it for another year”.

For example, your contract’s expiration date is September 1st, 2022. You can’t evict a tenant with one, two, or even three months’ notice. If you notify them of moving out in August 2022, the tenant will have tenancy rights until August 2023. They can leave earlier at their own request, but they have the right to stay for a whole year.

Also, the letter will need to indicate the reason for the eviction, such as the sale of the property, the arrival of the owner, etc.

Who pays for utilities and repairs?

As a rule, service fees for the maintenance of common areas are paid by the owner, and utility bills are paid by the tenant. Minor repairs costing less than 500 AED ($140) are also paid by the tenant, while more expensive work is paid for by the landlord.

How to receive rent while residing outside the UAE

If you do not live in the UAE, you can open a bank account in Dubai. This can be done based on owning local real estate in the status of a resident, however, some banks are willing to open an account for non-residents who have purchased local real estate.

In addition, being a non-resident of the country, you can cash a rental cheque at the bank.

Note that when buying property in Dubai worth at least 750,000 AED ($204,000), you can apply for a three-year UAE resident visa, and if you have a Dubai account, you will have a bank card that you can use online anywhere in the world.

Can I increase the rental rate for real estate in Dubai?

If you want to increase the rental cost, please view the rental rate index. According to senior real estate consultant Aram Grigoryan, “the increase in the cost of rent in Dubai is regulated by law. You can only increase your rent by a certain percentage if the average rent in the market has increased by that percentage”.

You cannot raise the cost only because you wish to do so. You can use a “rental calculator”, by entering your contact details and the system will show you how much you can raise your price by.

To raise your rent, you need to notify the tenant 90 days before the contract expires. If you give them 89 days’ notice, they may dispute your request and renew the contract under the old terms.

Our real estate agency will help you rent out your property

Are you planning to buy a property in the UAE for investment? Contact AX CAPITAL, the real estate agency in Dubai. Our experienced team will help you select a profitable and high-quality property that will ensure you a high ROI. We will also provide detailed advice on all related issues and take care of all the paperwork. In our property catalogue, you will find villas, apartments, penthouses and townhouses from trusted developers.

Submit your request through the contact form or contact us at your convenience. We will answer all your questions and become your guide in the real estate market of the United Arab Emirates.

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