ANAX Developments: what it takes to run a unit as a holiday home

Short letting produces the highest headline yields in Dubai and is quoted constantly in sales pitches. It is also licensed, and three separate permissions have to line up before a single night can be booked. Buyers discover the second and third after they have paid.

Three permissions, not one

• The regulator's permit. Holiday-home operation requires registration with the tourism authority, with the unit classified and listed. You either hold the permit yourself or operate through a licensed operator.
• The building's permission. The owners' association or the developer can restrict or prohibit short letting in the building. This is decided at building level and it varies within the same district and even the same street.
• The community or master developer's rules, in master-planned districts, which can add a further restriction.

All three must permit it. Establish all three in writing before buying if the model depends on nightly rates — not after, because none of them is negotiable afterwards.

What the economics actually look like

• Gross nightly revenue is not yield. Deduct platform commission, the operator's management share, cleaning and linen, consumables, utilities (which you pay, not the guest), furnishing and its replacement, the permit and classification costs, and the vacant nights.
• Occupancy is seasonal. Dubai's summer is materially quieter, and an annual average conceals months that do not pay.
• Furnishing is a real capital cost and it depreciates fast under short-stay use.
• Wear is higher, and refurbishment cycles are shorter than for a long let.
• The comparison that matters is net short-let income against net long-let income, not gross against gross. Sometimes short letting wins clearly; often, after honest deductions, it does not.

Where short letting genuinely works

Location does the work, not the apartment. Walkable distance to the beach, to the main attractions or to a business district; a building that permits it; and a unit that photographs well. In a mid-market cluster with no visitor demand, the same effort produces empty nights.

What to check

• All three permissions, in writing.
• Whether the building has a de facto operator and what it charges.
• Real occupancy and nightly rates for comparable units nearby, month by month rather than annually.
• Service charge, which continues regardless of occupancy.
• Escrow, Oqood, contractor and the delay remedy for anything off-plan.

Licensing rules and fees change. Confirm the current requirements with the tourism authority and the building's management before relying on any summary.