Americans had to have two cars in a family and even with all the brouhaha about fuel consumption,SUVs are the most advertised and wanted vehicles on the road. Like drug addicts,we had to get the fuel at any cost and so we boosted the income of the oil producing nations, just like the drug barons have been drowning in an avalanche of dollars provided by the drug addicts of our country. So who is to blame? We provided the buying power to the Arabs in the first place and then to cry about their financial clout is ludicrous.

We made our economy into a service economy – providing pizzas became more important than running efficient industries. Oh let the Chinese and the Indians do the hard work – we need our pizza parlors became the watch word. And as to industries, the only thing we thought important was to invest in arms development and for that even we put up pavilions in the Dubai Air show to make the Arabs buy our killing machines. A country which so single mindedly took the wrong turns in its financial and economic planning cannot now cry over what is happening. And right around the corner is the specter we should all be fearful about – the day the oil producers start selling their oil in Euros or a basket of currencies. Then these bail outs happening now would look like kindergarten stuff.

It is a very common and old practice, especially in the Italian, Spanish or French Riviera to rent out a personal property as a holiday-home to tourists. The short-term rental business has proven pretty successful in those countries with strong tourism affluence and since Dubai is working on becoming an international holiday destination, it is interesting to consider this investment opportunity.

By renting out a property on short-term basis a landlord has the chance to use the property for his/her own personal use, generate a high return of investment by letting it out to holidaymakers and at the same time benefit from the property value appreciation.

The short-term rental concept could be applied anywhere in the world but the real key to its success lays in its implementation within the local market in fact any successful business idea can be brought to Dubai and prove a complete disaster, the concept by itself is nothing new and certainly not invented in Dubai so the actual heart of the business is not much in the idea as it is in its execution.

Having the idea and the product (the property) is just about 10% of the business, what really matters is the marketing which I would value at 70% and the actual daily running which could be valued at 20%

Setting up an apartment for the short-term rental requires experience, interior designing skills, attention to details and plenty of time and resources to follow up the actual furnishing process, utilities connections, daily running and marketing.

Some details are extremely important and if overlooked, will compromise the stay of your guests hence it is essential to set up the property with the guests needs in mind rather than following a questionable personal taste.

One detail that is consistently overlooked is the actual efficiency of the bedrooms curtains, which in the majority of the cases do not block the windows light properly, this is usually due to lack of experience or to good bargain ready-made curtains resulting in a horrible 6 am daily wake up call for your guests.

Another important aspect to acknowledge is the considerable investment to be made in purchasing the bathrooms face and body towels, it is in fact necessary to provide a high number of these so to allow a twice weekly replenishment and the same goes for bed sheets, quilt covers, pillow cases etc

In most cases the do it yourself schemes work pretty well when you do have experience, knowledge and passion about what you are engaging with, other wise it will simply result in complete frustration to say the least.

Without considering the daily management issues and the inevitable guests complaints even the twice-weekly house keeping service is a far more demanding task then what it seems

A reasonable solution to this, especially if you are handling more then one property, is to refer the entire marketing and management to a professional agent who for a fee (usually 20% of the rental) will take the weight off your shoulders with a smile.

In the current market a 5 stars marina-view one bedroom apartment in Dubai Marina Face 1 (where all the cafs and restaurants are) will rent for approx AED 95.000/- per year if unfurnished, the same property can fetch up to a AED 235.000/- a year if rented out furnished on short-term basis and after deducting the 20% agency commission plus about AED 40.000/- for the 5 stars furnishing and approx AED 8.000/- a year for the utility bills, this will live the owner with a net AED 142.000/- (on occupancy rate of 79%)

The numbers speak for themselves however is important to remember that where there is a good return there is also a certain risk and many will agree that the most delicate figure of the above calculation is the occupancy rate which cannot be guaranteed in any property short-term rental management contract.

Keeping the above consideration in mind, would you wish to engage an agent for your short-term rental requirements, it would be wise to commit for an initial trial period of maximum six months, this period shall allow you to gather enough details and should give you a good idea about the reliability and actual potential of the agent/marketer you are dealing with.

Would you rather get more hands-on with the business, you could opt for a non-exclusive marketing agreement, also available in the market and you will be able to market your property through other agent/marketers and potentially increase your exposure however this is not necessarily the optimum solution in fact many agents will give priority to the properties of those clients with whom they have contractually committed with.

Following is the list of some of the most promising residential properties in and around Dubai:

Lakeside:

Lakeside is a beautiful residential development of two 21-storey and two 22-storey towers, high above the podium. Lakeside is set amidst beautiful lawns, fountains and gardens. A project designed to offer you true value for money with interiors that have been tastefully designed and every detail breathing comfort. A distinct floor plan that offers you lake views as your home is gracefully aligned around a crescent-shaped portico. With everything you’ll need, available in the comfort of home or a short walk on your home grounds.

Lakeside is a balanced world with state-of-the-art facilities, created within a thoughtfully developed and eco-friendly environment. Balance the buzz of your active social life with an Array of fitness facilities to match. Relax at the end of the day or refresh yourself for the next.

Emirates Gardens:

The unique facade of Emirates Gardens catches the eye, miles away! The beautiful development (Two buildings together form a development) is a delightful combination of 3 buildings, Gardenia, Lavender and Rose, each ground plus four storeys. Exquisitely punctuating the landscape with refined style and elegance, each development would have Retail & Restaurants on ground level alongside the street. Waterway system running through the community is a waterway system with walkways that not only connect the community but also provides an alternative pedestrian system and enhances the retail and residential developments that line its bank.

Ocean Heights:

Ocean Heights is situated in the premium acres of Dubai, earmarked for resorts, boutique hotels and breathtaking futuristic developments. Where you can choose between the refined pleasures of luxury hotels and entertainment plazas, and a sundown barbecue with your family and friends.

When you have your home in one of the 680 luxury freehold condominiums of Ocean Heights, overlooking magnificent vistas on all sides, your views simply have to be beautiful and grand. In fact, the majestic tower is a sight by itself; spiraling skywards dramatically different from every angle you view.

At Ocean Heights, experience the finer points of life at their finest. And discover a lifestyle, which is just your kind, in a neighborhood that is home to the cream of Dubai’s avant-garde society. Up here, the good life gets even better.

That’s what the ambience of Ocean Heights is; it urges you to live a healthy life, to the fullest. Besides the refreshing breeze around, you will have all in-house amenities to relax and stay in the pink of health.

Damac Properties are the largest private master developers in the Middle East offering the most luxurious and exclusive residential and commercial Dubai Real Estate, Dubai Freehold Property and Dubai Investment Property for sale.

One is invited, if not enticed to explore the emirate’s old souqs, while sipping a fragrant Arabic coffee, one can also loose time in the dunes on an exhilarating desert safari, or be one with nature by diving into the dazzling marine life – there is something for everyone in Abu Dhabi.

Many investors are largely unaware of the fact that Abu Dhabi emirate is in fact archipelagic, meaning that nearly 200 islands are strewn along its coastline. Accordingly, ‘island-hopping’ is a popular pastime among the more affluent residents (who have boats) and even for non-boat owners, where public transportation is available.

There are various private tour operators, which also offer similar island-hopping services. Due to the fact that some islands are currently undergoing major development, access may be limited for sometime. It is advisable to check with your local tour operator for more information on which islands are accessible at present, and which are not.

The vast number of islands which are available to tourists and the locals in Abu Dhabi are excellent destination choices. The following Islands can be visited and enjoyed at length:

– Lulu Island: perfect for short weekend trips, this large man-made island is situated directly opposite the Corniche and is accessible by boat. Visitors are free to take a dip in the pools or beaches and then enjoy a treat from a couple of restaurants, coffee shops and cafeterias on the island.

- Saadiyat Island: Located to the east of the Corniche, this island is being transformed into a luxury leisure and cultural destination. This island boasts a massive, multi-billion dollar development project that includes “world-class entertainment centres, museums, resorts, upscale residences and business centres are currently being built on the natural island.”

Al Futaisi Island: The perfect bird spotter’s paradise, and situated only five kilometres south of Abu Dhabi city, this island offers a range of activities such as nature trips via a local bus tour or through bicycles. There is also a well-kept stable on the island which houses purebred Arabian horses as well as camels, which can take visitors for rides.

These are just a few of the 200 islands one can visit when in Abu Dhabi.

According to the tourist sector in Abu Dhabi, the best time to pay these bountiful islands a visit would probably be the period between November and April.

Despite the fact that Dubai is quite new on the property-buying radar, many developments in Dubai are setting and maintaining a high standard of quality and service – making this UAE country a top choice for investors, holiday makers and retirees the world over.

So, why exactly are tourists and investors so keen on Dubai?

Well, aside from the obvious: the famous, sought-after beaches; diverse landscape; rich culture and idyllic climate – Dubai is also, most importantly, reasonably affordable.

Tourism, as an industry, is quite the relatively new concept for Dubai. This novel industry is however fast becoming one of the main reasons why people are flocking to Dubai in droves.

With an increase in tourism statistics of approximately 30 per cent in the last year alone, one can only assume that the Property Industry in Dubai is also well on its way to new heights and bigger profit margins.

Picture unchartered territory at your doorstep; long lazy days basking in the warmth of the sun; days and nights spent bathing in the warm waters of idyllic beaches – and you will find your mystery haven is situated no where else but in the delightful Dubai.

The fact that Dubai is the worlds biggest boomtown just at the moment is cause for any investor
to take a good close look at the property market, but its far from the only one, here are few more

Many believe that Dubai property is well below those of comparable cities around the world.

Property prices are currently estimated to be c. 50% below real market value (compared to similar commercial hub cities with mature property markets such as Hong Kong, Singapore, Kuala Lumpur)

1,000sqft apt in downtown Singapore = GBP560,000.

Comparable apt in Dubai (currently in v short supply) = GBP170,000.

1 bed apts in DSC just GBP115,000.

Villa prices (per sq ft) increased by 31% in 2005.

Apartment prices (per sq ft) increased by 10% in last six months (applies to occupied, not off-plan properties).

Land prices are up 184% on this time last year.

There is 53% less development land available than this time last year.

Sources: AME Info, Dubai Investment Boutique Housing Price Index, Construction Weekly Magazine and CBR Ellis

Rental Demand

Rental rates increased by 38% in 2005.

New decree issued in 2005 to cap annual rate incs at 15%.

Cap does not apply to new rentals, or to new tenants.

Current market rental rates in Dubai c. GBP12.50 per sq ft.

A 475 sq ft studio in Dubai Sports City would yield an annual rent of c. GBP5,750 today = 10% rental return.

On completion in 2007 rental rates should have risen by another 25% – 50%, yielding GBP7,450 GBP8,450 per year, or a 12.7% – 14.8% rental return.

Dubai’s construction is happening at a blistering pace. Dubai Holding’s iconic
Burj Al-Arab Dhow Sail shaped Hotel was one of the first iconic buildings to
grace Dubai’s skyline. However views from the top of Burj Al-Arab also
illustrate that Dubai Holding’s is not the only player reshaping the Dubai
skyline. Nakheel’s three Palm Islands have captured the World’s real estate
watchers imagination and caused a ripple of excitement that that helped act as
the catalyst of the Dubai Real Estate boom.

A restaurant on the 27th floor of the same Hotel gives a breathtaking view of
the 300 Islands being built 4km off the Dubai coastline, but before these are to
complete, Emaar, the Emirates third largest player is due to complete Burj
Dubai. It is set to complete in 2008 and stand 700 metres high, making it the
tallest building in the World. The competitiveness between the three is being
played out on a grand scale, and Nakheel has already announced the building of
Al Burj, which will no doubt be higher still than Burj Dubai.

Lets dive in and look at the reasons Dubai has become such a hotbed for the global investor community.
Dubai is positioning itself to be a worldwide contender in the tourism industry.

Dubai is one of seven emirates that make up the United Arab Emirates, and has 1,318 kilometres of coastline and a population of about 1.5 million.

Dubais growth of the last fifty years has been incredible. In the 1966, Dubai which was already a relatively wealthy trading centre discovered oil.
The oil revenue led to accelerated economic and social reforms.

Tourism contributes to over 40% to Dubais economy, with 4.7 millions tourists in 2002, and projections of 15 million in 2010.

Dubai has sub tropical and arid climate. Winter temperatures are as low as 10 to highs of 50 degrees Centigrade in summer.
The pace of economic growth in Dubai over the last 20 years has been incredible. Trade has grown 9% per annum over the last 10 years.
With strong growth projected with the development of the following large scale projects:

Dubai Festival City

Dubai International Financial Centre

Dubai Flower Centre

Dubai Internet City

Dubai Marina

Dubai Silicon Oasis

The Dubai Mall

Burj Dubai

Dubai Healthcare City

Dubai Autodrome and Business Park

Dubai Humanitarian City

Dubai Investments Park

Dubai Media City

Dubailand

Dubai Maritime City

The Palm

The World

At present the three companies are working on combined projects of $100bn.
Nakheel itself has $30bn worth of projects under construction. Emaar is the only
one of the three listed on the stick market. Its share price consequently saw a
646% rise in a little over a year. Many say a Nakheel listing is inevitable.
Many are asking about the sustainability of such development. Population growth
is set to grow from 1.4m in 2005 to 5m by 2020.
Projects such as The World costing from 5.7bn to 22bn, and Dubailand have also been intended to capture the attention of the global media as well as the interest of
international property investors. Dubailand covers 2 billion square feet, and comprises 6 sports zones. Few predicated a few years ago that Dubai would become a burgeoning middle east financial hub in the shape of the DIFC zone, as well as having one of the largest airlines.
Dubai has a hereditary monarch. The current ruler Sheikh Mohammed bin Rashid al-Maktoum. He was succeeded his late brother, and now performs the role of Vice President and Prime Minister of the UAE. Dubai has seen exceptional growth under the stewardship of Sheikh Mohammed , and hence has one of the worlds highest GDPs per head.

Visitor numbers doubling to 5.5m upto 2004 has fuelled property speculators, and the dubai property gravy train has roared ahead. This train has been partly fuelled by petro-dollars, as well as funds also finding their way into the stock market.
The new property law will allow expats that have purchased new off plan homes to register them with the Dubai Land and Properties Department. The new law has been predicted to boost demand by allowing long term mortgages and has allowed conveyancing by International much easier, since it now sits within a legal formal frame work.

Another important underpinning to the Dubai market is that the three top players (Dubai Holdings, Nakheel and Emaar) will always be able to manipulate the supply side of the equation. The three and the government are intertwined and co-operation to avoid any property bubbles would be the most likely were the market to become hostile.

Like any market being slowly heated, a key is always at what point you are entering the market. Many believe Dubai has a long way to go yet, since the largest projects have yet to be build; mortgages are still not freely available; tourism has not yet peaked and the freehold law has only now been formally acknowledged, lastly the tax advantages are enough to make the average swiss banker wince no local income tax, capital gains tax , inheritance tax or stamp duty.

Costs of Construction Drives up Prices.
Across the Gulf States construction project management milestones are slipping. Residential, Office and Hotel projects are suffering delays due to shortages
in labour and to a lesser extent materials. The Gulf, China and India are competing for construction raw materials, and this is feeding through to
construction costs of estimates of 15% over the last two years. Expat workers labour on the large Gulf infrastructure projects, such as the Palm.

Arab GCC states 15th biggest economy.

The GCC states comprising: Bahrain, Kumwait, Oman,Qatar, Saudi Arabia, and the UAE, now have a combined GDP that would place them 15th amongst the world’s
largest economies. Many of these economies have doubled in the last five years.

Emaar’s chairman gives his views on Dubai’s Real Estate Sector.

Mohamed Alabbar is the chairman of Emaar, which is the largest listed real estate developer within the GCC states.
Founded in 1997 it now has a capitalisation of $40bn. It developed the worlds tallest buillding the Burj Dubai. Emaar
started with building themed onshore communities, many of which were aimed at the expat community.

A recent partnership with Italian designer Giorgio Armani to create the first Armani Hotel.
It will offer 175 rooms within the Burj Dubai.

Dubai’s new financial role

Dubai International Finance Centre has grown by by 15%, and has overtaken Luxembourg in the area of Islamic bonds. The six states of the GCC (Gulf Cooperative Council) have achieved double digit GDP growth. Making the GCC the fastest growing economy after China and India. An estimated $450bn of foreign assets have been added over 2006/7. A surplus of 30% of GDP is being invested and spent on domestic social and infrastructure projects. Dubai based banks are managing much of the petrodollar funds, which was not the case in previous oil price booms.