Yes, you can rent out your property short-term while it’s on the market for sale in Dubai, but there are specific considerations and regulations you need to follow. The Dubai real estate market allows property owners to generate rental income while simultaneously listing their property for sale, but the process requires compliance with the Dubai Land Department (DLD) and Dubai Tourism and Commerce Marketing (DTCM) rules.

Key Considerations for Short-Term Rentals While Selling

1. Regulatory Compliance:

   • To rent out your property short-term in Dubai, you must register it with Dubai Tourism and Commerce Marketing (DTCM). This involves obtaining a holiday home license, which allows you to list your property on platforms like Airbnb, Booking.com, and similar portals.

   • The property must meet the required standards set by DTCM for short-term rental properties, such as quality of furnishings, cleanliness, and safety measures.

     
     

2. Consent from Mortgage Provider:

   • If your property is mortgaged, ensure that you have the approval of your mortgage provider to rent the property on a short-term basis. Some lenders may have specific restrictions on how the property can be used while it’s listed for sale.

     
     

3. Tenancy Contract Flexibility:

   • Ensure that the rental agreement provides flexibility for sale-related activities. You should clearly outline the terms under which the tenant agrees to allow viewings or inspections by potential buyers. This is especially important for short-term tenants, who may be less flexible than long-term renters.

     
     

4. Impact on Marketability:

   • While renting out your property short-term can provide you with income, it may affect how quickly the property sells. Some potential buyers may be deterred by a property that is occupied with tenants. Additionally, managing viewings and property maintenance with short-term guests in place may require extra coordination.

     
     

5. Market Demand for Short-Term Rentals:

   • Short-term rentals in Dubai, especially in sought-after locations like Downtown Dubai, Dubai Marina, and Business Bay, have high demand. Properties in these areas are attractive to both tourists and business travelers, which means you could generate substantial rental income while the property is on the market.

   • According to Property Finder, short-term rental properties in prime areas can yield high returns. For instance, a 1-bedroom apartment in Business Bay can fetch AED 118,000 annually, while similar properties in Downtown Dubai may see even higher returns due to the tourist influx.

     
     

6. Short-Term Rental Returns:

   • Data from AirDNA shows that the average daily rate (ADR) for short-term rentals in Dubai is approximately AED 500-600, depending on the location and property type. Occupancy rates can range between 60% to 80%, providing an attractive income stream for property owners.

   • A well-maintained and managed property in high-demand areas like Dubai Marina or JBR (Jumeirah Beach Residence) can generate gross rental yields of 8% to 10% annually.

Process of Listing Your Property for Short-Term Rental While Selling

1. Holiday Home License:

   • Obtain a holiday home permit from DTCM. You can apply directly through DTCM or through licensed operators who can manage your property on your behalf.

     
     

2. Listing and Management:

   • Once you have your license, you can list the property on platforms like Airbnb or work with property management companies that specialize in short-term rentals.

     
     

3. Marketing the Property for Sale:

   • Continue marketing your property through real estate agencies and property portals. Ensure that potential buyers are aware of the property's short-term rental status, but also highlight that it will be vacant upon sale if necessary.

     
     

4. Exit Plan for Sale:

   • Have a clear exit strategy in place for tenants, ensuring you can provide vacant possession when the sale is completed. This needs to be communicated to both short-term renters and potential buyers.

This strategy is particularly effective in areas with high rental demand, and by obtaining the proper licensing and ensuring flexibility in tenancy agreements, you can make the most of your property while it's on the market.