Second Home in Dubai: Enjoy Vacation and Earn Rental Income Year-Round

Dubai has reinvented itself as a global lifestyle and business destination. As of 2024, the city welcomed over 18.5 million international visitors, and this number is projected to cross 19.2 million in 2025. With Expo 2020’s legacy and the government’s continued push to make Dubai a tourism powerhouse, second homes in strategic areas have seen a rise in short-term rental demand.

Dubai International Visitors (2021–2025)

Observations from the Data:

• Dubai’s tourism industry got more than doubled in 2022, basically bouncing back strongly after pandemic lows.
• Growth continued in 2023 and 2024, with 2024 reaching a record 18.72 million international visitors.
• In the first quarter of 2025, Dubai added 5.31 million visitors, reflecting a 3% year-over-year increase, indicating a sustained momentum.
• Dubai has such a healthy rate of international visitors, which translates into the upscaling demand for the rental homes. This is the reason why this rising demand further shifts and translates into the growing short-term rentals in Dubai. 

Dubai's property market allows foreigners to own freehold properties in many prime areas. This opens up a dual advantage or dual-use assets in a sense that owners can stay in their homes for a few weeks or months annually and list them for short-term rental the rest of the year.

Average Holiday Home Yields by Community

Note: According to market data, short-term rental yields in Dubai average between 8% to 11%, significantly outperforming traditional long-term rental markets in Europe or the U.S.

Over the years, Dubai has emerged as the Airbnb Capital of the Middle East. It has simplified licensing from DTCM and rising demand from digital nomads, families, and event tourists, the short-term rental sector has exploded. Dubai's occupancy rates for vacation rentals remain among the highest globally, especially in high-tourism seasons like December to February.

Observation from the data:

• *Based on 2018 = 5,000 listings and noting ~100% growth over three years through to 2021, implying approx. 6,000 listings in 2020
• By 2021-22, listings rose sharply to around 14,000 in 2021 and ~22,000 in 2022 .
• By early 2024, listings reached nearly 25,000 (24,792 active).
• As of May 2025, active listings have adjusted to 16,581 which is possibly due to shifts in market dynamics or stricter regulation.

What sets Dubai apart from many seasonal holiday destinations is its 365-day appeal. Whether it's shopping festivals, beach holidays, business expos, or medical tourism, there’s always a reason to visit. The year-round tourism translates directly into high occupancy rates and stable rental income for second-home owners, making Dubai a truly reliable investment destination.

Types of Tourists Renting Holiday Homes in Dubai

Lifestyle Benefits for You and Your Family

Dubai’s luxury lifestyle is unmatched. Think: beach clubs, desert escapes, golf courses, five-star dining, futuristic malls, and zero income tax. For second-home buyers who visit a few months a year, it’s the perfect blend of pleasure and purpose.

Note:Additionally, investors purchasing property worth AED 2M+ may qualify for a 10-year Golden Visa, offering long-term residency for themselves and their family.

An Indian investor bought a 1-bedroom apartment in JVC for AED 650K in 2021. By 2025, the property appreciated to AED 950K, while earning an average of AED 6,500 per month through short-term rental.

• Capital Gain: ~46%
• Rental Yield: ~9.2%

What We can learn: This dual-income model is now a common success story in Dubai.

Location is key when buying a second home that doubles as a rental asset. Although, there isn’t any specific area of Dubai which completely stands out compared to the other, because every area is a masterpiece in itself, being very thoughtfully designed. But, if we want to carve a list out of all the communities, the below listed communities top the charts:

Dubai offers a rare opportunity where your holiday retreat can also be a high-performing income generator. With consistent tourism, investor-friendly laws, and high rental yields, buying a second home in Dubai is more than a lifestyle choice, it’s a wealth-building decision. So, just invest where you prepare for your vacation. Now is the time to explore the possibilities of owning a vacation home that actually pays you back.