Tourism

Dubai government initiatives driving the development of short-term property rentals show an innovative city prepared to take on global market obstacles directly, a property chief said today.

Previously this month, the Department of Tourism and Commerce Marketing (DTCM) launched a plan to create a timeshare market in Dubai in order to help widen the tourism sector.

Firas Al Msaddi, Chief Executive Officer of fm Properties, says it is the most up to date in a series of government actions which are enhancing Dubai realty by enhancing rental profits for property owners and bring in new financiers. Vacation residences could raise to 15-25% more profits compared to long-term rentals, he said.

" Although the long-lasting occupancy trend remains healthy in Dubai, it has slowed down in the past 2 years due to the massive supply of properties," he says. "By embracing the principle of holiday houses and introducing legislation, the government has created a new income stream for proprietors. They can have tourists as renters for the very first time and this increases occupancy rates.

Adds Al Msaddi: "It's a perfect example of just how Dubai reacts quickly to global market challenges and continues developing, not simply to stay on top of the world's leading cities, however to surpass them by being constantly creative and innovative.

" Also in cities like London, Airbnb is not directly a government-regulated business.That it is 100% controlled right here, by the DTCM along with the Dubai Economic Division, demonstrates how much in advance Dubai remains in its thinking."

Al Msaddi says fm Properties currently has joined possessions of greater than AED300 million under its vacation homes license from the DTCM at City Walk in Dubai. The company plans to grow its overall properties under holiday residence administration to AED1 billion in between City Walk, Downtown and Dubai Marina by the end of this year.

Says Al Msaddi: "Although we do not have years of historic data on vacation house returns, the right home with the right area tends to create 15% -25% higher income for property managers compared to long-lasting leasing.

" Sometimes like the here and now, an over-supply of house suggests it takes longer to find tenants. These factors will persuade more property managers to pick the holiday residences choice. They know they will not be locked up by lessees' rights of at least two year's notice to vacate, or be held back from increasing lease for the initial two years."

Landlords planning to offer could gain rental revenue as much as the last day of possession. To generate normal income, they need to make certain exceptional daily up-keep. Yet a greater level of upkeep compared to long-lasting rental residential property makes vacation houses a lot more attractive to buyers.

" As soon as a healthy revenue trend is built over 1 or 2 years, the residential or commercial property ends up being a major target for investors searching for high revenue generating properties," states Al Msaddi.

" However not every property could be successful as a vacation residence. We sometimes encourage clients to adhere to long-term rentals if we don't think their residential property has the right area, connection, size, sight, layout or type."

Caption: Firas Al Msaddi - says higher revenues will encourage more Dubai property managers to choose the holiday homes option.

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