A few months ago, an owner sent me a revenue projection for his apartment in Business Bay.
The number at the top looked fantastic.
High occupancy.
Strong nightly rates.
A revenue figure that would make any owner pay attention.
His question was simple:
“Is this realistic?”
The answer surprised him.
The revenue projection itself wasn’t necessarily wrong.
The problem was that it only showed half the story.
Because when owners ask:
“How much can my property earn as a holiday home?”
What they are really asking is:
“How much money will actually end up in my bank account?”
Those are two very different numbers.
And that’s where many owners get caught out.
Not because holiday homes don’t work.
They do.
Dubai remains one of the strongest short-term rental markets in the region, supported by tourism, business travel, relocation demand, events, and a growing number of guests who prefer apartments and villas over traditional hotel rooms.
The issue is that many revenue forecasts focus heavily on income and spend very little time discussing what it actually costs to operate a holiday home properly.
The good news is that most costs are predictable.
The better news is that once you understand them, they stop being scary and simply become part of the business.
First, let’s put costs into perspective
Every property has costs.
A long-term rental has costs.
A vacant property has costs.
Even a property you only use yourself a few weeks each year has costs.
The question isn’t whether costs exist.
The question is whether the additional income justifies them.
For many Dubai properties, the answer is yes.
But only when the property is set up correctly, priced correctly, and managed correctly.
One mistake I see owners make is focusing entirely on management fees or permit costs while ignoring the bigger picture.
I’ve seen owners spend weeks negotiating a management fee reduction of a few percentage points while their apartment sat empty for an extra two weeks each month.
The vacancy cost them far more than the fee difference ever would.
That’s why understanding the complete picture matters.
The setup costs
The first category is getting the property ready.
This is usually where owners spend the most money, but only once.
Typical setup costs include:
- Furnishing and styling
- Smart lock installation
- Utility deposits where applicable
Furnishing costs vary significantly depending on the size of the property and the level of finish you are aiming for.
A simple apartment may require AED 20,000–30,000.
A premium property may require significantly more.
This is one area where cutting corners rarely works.
Guests forgive many things.
They rarely forgive an uncomfortable mattress.
Poor-quality bedding.
A sofa that has seen better days.
Or a property that feels tired before they’ve even unpacked.
The highest-performing holiday homes are rarely the most expensive.
They’re usually the most comfortable.
We’ve seen beautifully located apartments struggle because they looked tired online.
We’ve also seen fairly simple apartments outperform expectations because they felt fresh, practical, and welcoming.
The costs owners usually worry about
Ironically, the costs owners tend to worry about most are often the least significant.
Permit fees.
Insurance.
Government requirements.
These costs are predictable.
Current DET permit costs are:
- Studio / 1 Bedroom: AED 370
- 2 Bedroom: AED 670
- 3 Bedroom: AED 970
- 4 Bedroom and above: AED 1,270
Holiday home insurance typically ranges between AED 500 and AED 1,000 per year.
These costs are easy to budget for.
They rarely surprise anyone.
And they almost never determine whether a property succeeds or fails.
What comes out of every booking?
Every booking generates revenue.
It also generates costs.
Tourism Dirham is one example.
This government fee is collected from guests and remitted to the authorities.
VAT may also apply depending on ownership structure and registration requirements.
Then there are platform commissions.
- Airbnb
- Booking.com
- Expedia
- VRBO
These platforms bring guests. In return, they take a commission.
As a rough guide:
- Airbnb: approximately 16%
- Booking.com: approximately 15%
Many owners initially dislike this idea.
Until they realise the alternative is an empty apartment.
A commission on a booking is generally better than no booking at all.
One of the biggest monthly costs owners underestimate
Utilities.
Unlike long-term rentals, holiday home guests expect everything to be included.
They expect:
- Air conditioning
- Internet
- Hot water
- Fully functioning utilities
And they use them.
Based on our operating experience, realistic monthly utility costs, including DEWA, WiFi, district cooling where applicable, and gas, are approximately:
- Studio: AED 1,300 per month
- 1 Bedroom: AED 1,600 per month
- 2 Bedroom: AED 2,300 per month
- 3 Bedroom: AED 2,800 per month
These figures vary depending on occupancy, seasonality, and guest behaviour.
Summer is usually where owners get their first surprise.
We’ve had owners question utility bills until we explained that guests had spent a week treating the apartment like Antarctica while it was 45 degrees outside.
It happens.
You budget for it and move on.
The important thing is not the exact number.
It’s understanding that in a holiday home, utilities become part of the guest experience.
Guests expect strong WiFi, reliable hot water, and an apartment that stays cool in the middle of August.
When those things work properly, nobody notices.
When they don’t, they quickly become reviews.
Maintenance: the cost that protects revenue
Many owners view maintenance as an expense.
We view it as revenue protection.
Guests notice maintenance issues immediately.
A leaking tap.
A blocked drain.
An AC unit struggling in August.
A door that sticks.
A loose dining chair.
Small issues quickly become reviews.
Reviews quickly become lost bookings.
Preventative maintenance usually includes:
- AC servicing
- Drain cleaning
- Pest control
- Annual inspections
A typical annual budget is around AED 1,000 depending on the property.
That money is rarely wasted.
The owners who spend a little maintaining their property usually avoid spending much more fixing it later.
The cost nobody includes in their forecast
Wear and tear.
Every holiday home experiences it.
And almost nobody includes it in their original projection.
Linen eventually needs replacing.
Pots and pans get worn out or burned.
Utensils disappear.
Wine glasses break.
Furniture gets scratched, stained, or occasionally damaged.
None of these expenses are dramatic on their own.
But over time they add up.
One owner once questioned why we kept replacing kitchen items.
Then he spent a weekend in his own apartment after dozens of guest stays.
By Monday morning he understood.
The reality is that these things happen in our own homes too.
Every now and then we buy a few new wine glasses because some have broken.
We replace a set of teaspoons that somehow disappeared.
We buy new kitchen utensils because the old ones have seen better days.
The difference is that a holiday home sees far more use throughout the year.
Different guests.
Different cooking habits.
Different families.
Different lifestyles.
So those small replacements happen more often.
That’s completely normal.
The important thing is not being surprised by it.
The owners who perform best financially are not the ones who avoid these costs.
They are the ones who understand them from the beginning and build them into their expectations.
A well-run holiday home is still a very attractive investment. The key is understanding the full picture rather than focusing only on the revenue number at the top of the forecast.
The hidden cost of empty nights
This is the section most articles miss completely.
The most expensive cost in holiday homes is often not a cost at all.
It’s vacancy.
An empty apartment still pays:
- Utilities
- Insurance
- Community charges
- Mortgage payments
Revenue stops.
Expenses don’t.
That’s why occupancy matters.
And it’s why professional pricing matters.
We’ve seen owners refuse a booking because they wanted an extra AED 50 per night.
The apartment then sat empty for a week.
Sometimes focusing on the wrong number becomes surprisingly expensive.
One owner spent weeks negotiating a management fee reduction.
Another owner focused on reducing vacancy by just a few nights per month.
The second owner ended up making more money.
Holiday homes are one of the few businesses where reducing empty nights often matters more than reducing small expenses.
Should you manage it yourself?
Some owners enjoy it.
A few are excellent at it.
Most underestimate it.
Running a holiday home is not uploading a listing to Airbnb and waiting for bookings.
It includes:
- Guest communication
- Pricing management
- Check-ins
- Check-outs
- Housekeeping coordination
- Maintenance follow-up
- Reviews
- Compliance
Seven days a week.
Including weekends.
Including public holidays.
Including the guest who calls at 11pm because they can’t find the access card.
Management fees typically range between 15% and 25%.
The important question isn’t:
“What is the fee?”
It’s:
“What am I getting for the fee?”
Because the cheapest operator isn’t always the cheapest option.
Poor pricing, poor occupancy, and poor guest experience can cost significantly more than the management fee itself.
Costs, by Property Size
So is running an Airbnb in Dubai still worth it?
For many properties, absolutely.
But the owners who do best are rarely the ones chasing the highest revenue projection.
They’re the ones who understand both sides of the equation.
Revenue.
And costs.
Holiday homes are not magic.
They’re a business.
And like any business, understanding the numbers is what turns a good property into a successful investment.
The goal isn’t to eliminate costs.
The goal is to ensure that the additional income generated by a well-run holiday home more than justifies them.
That’s exactly why so many owners choose the short-term rental model.
In reality, most owners don’t ask us whether there are costs.
Every property has costs.
The real question is whether the additional income from short-term rental outweighs them.
For many Dubai properties, the answer is yes.
We’ve seen many owners earn significantly more than they would have on a traditional long-term lease, even after accounting for the additional operating costs.
But it depends on the property, the location, the quality of the operation, and having realistic expectations from the beginning.
Every property is different.
A two-bedroom in Business Bay, a villa in Jumeirah Golf Estates, and an apartment in Dubai Marina will all have different costs, occupancy patterns, guest profiles, and revenue potential.
That’s why we prefer assessing properties individually rather than relying on generic projections or market averages.
The owners who make the best decisions are usually the ones looking at the numbers for their specific property, not someone else’s.
If you’d like to understand what your property could realistically earn after operating costs, we’re happy to provide a free assessment based on your specific unit, location, and current market conditions.
No inflated projections.
No unrealistic promises.
Just a realistic view of the opportunity.