More landlords in the UAE are now open to short-term lease agreements in a bid to boost income or keep their properties occupied amid a property market slowdown, a real estate firm has indicated.
“With rental prices low, investors are educating themselves on the short-term lettings market as they see more profit can be made and it gives them time to think about future plans they may have for the property while receiving an income from it,” said Maria Sale-Layug, the head of the new short-term lettings department at Allsopp & Allsopp.
“As a business, we are always looking for ways to grow and reach a different clientele. Short-term lettings is the next step for us and if we are being honest, is a market we could have stepped into a couple of years ago,” said Lewis Allsopp, CEO of Allsopp & Allsopp.
Shift in the market
Housing rental arrangements that are less than 12 months used to be unheard of in the UAE. Most landlords would prefer to rent out their flat or villa for a minimum of one year, an arrangement that ensures property owners get income consistency for the whole year.
However, with the coronavirus pandemic impacting many livelihoods and businesses, the market has changed. These days, some tenants would prefer not to be tied into a long-term contract, especially with the uncertainty surrounding their source of income.
According to Allsopp & Allsopp, enquiries about short-term lettings picked up after the COVID-19 lockdown. There also appears to be a demand from visitors, who now prefer to stay in private accommodations rather than in hotels.
“Short-term lettings have recovered well post the COVID-19 pandemic lockdown in Dubai with enquiries coming from both guests and landlords as they navigate their way through the changes they have faced,” the real estate firm said in a statement issued on Sunday.
According to Sale-Layug, short-term lettings is an industry that is recovering well “due to the anxiousness of travellers”.
“People who are travelling for business and with their families are looking to stay in private accommodation – they are opting against hotel stays to avoid overcrowding,” she said.
“Many landlords have [also] enquired about short-term lets due to a change in circumstance and a repel from long-term commitments.”
She noted that landlords won’t just benefit from the flexibility of short-term leases, they can also earn a higher return.
“If a landlord feels they might want to sell at some point, they don’t have to give the mandatory one-year notice to a sitting tenant. If it’s a second property, landlords can earn an income but still have the property for their own use at periods through the year, or even retain the option to move back into it themselves, should the need arise at any point,” she said.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
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