How to Make Money with Dubai Rental Property

Hi, I'm GG Benitez, a certified international property specialist connecting the opportunities here in Dubai with American and Canadian investors. I have a very special guest on today to answer some of the most important questions that my investors have about short-term rentals such as Airbnb. Stay tuned. This is season two of The Dubai Connect podcast. So today we are going to have your most important questions about short-term rentals answered by my very special guest Hassen, who's here with Proper, a property management company specializing in short-term rentals. But I will turn it over to you to do the introduction. Thank you very much. Thank you for having me. Of course, my name is Hassen. I'm the general manager for Proper Luxury Homes. So like you mentioned, we are a specialized short-term rental management company managing just closing in on 1,000 units globally. Incredible. Operating between three cities in South Africa, Dubai, and we just expanded into Lisbon in Portugal as well. And we will continue to grow. Like there's another country coming up in Europe very soon. Ooh, congratulations. Thank you very much. Out of those three, what is your? Tell me about some of the statistics about where Dubai falls in as far as numbers go. So we're managing over 500 units in Dubai, okay? We're managing 750 plus units in South Africa. Obviously, as a company we have been in business for eight years. Just this month, we haven't closed the month yet, but we have created over 17,000 bookings. Wow, which is absolutely amazing. Incredible, yes. And in Dubai, we focused, even in South Africa, towards the luxury segment, okay? We have anywhere from a nice one-bedroom studio in downtown to a penthouse in Palm, which is our biggest property of 7,000 square feet. That must be a fun one. Uh, the inspections are not fun. Oh yeah, right? But as a property, it is indeed. Tell us a little bit about what the numbers are looking like for Airbnb and growth here in Dubai so that my investors can understand the opportunities that exist here and that continue to see a trend upwards of the opportunities with Airbnb and other short-term rentals. Because you don't only work with Airbnb? Yeah, absolutely. So coming to the second part first, we work with all the major online platforms: Airbnb, Booking.com, Homeway, VRBO, Agoda, Expedia. We obviously have our own website as well through which we generate. We work with a lot of luxury concierge companies, tour operators, corporates. So it's basically a huge segment of business we get. In terms of growth, the buy is phenomenal. You know, we as Proper started off in Dubai just closing in on three years. When we started off, okay, there were only 12,000 listings. Now, this is a few weeks ago, we probably have a lot more, with 35,000 active listings in Dubai. So three times. At least three times, okay? And continuing to grow. It's continuing to grow. You know, it's phenomenal. Your rates are great. Your occupancy, obviously, you have a huge increase in the number of visitors coming into Dubai as well. So there has been an increase in supply for sure. But at the same time, we have the demand graph as well going up. Just this month, if I share, we're closing in on 80 percent occupancy. And how does that compare to other cities? Because that's really an important number to consider when people say, sometimes I'm asked, well, isn't there just overbuilding over there? No, there isn't. And one of the key factors to look at is the occupancy rate, yeah? So we as a company are very transparent. You know, we like to show you the nice figures where we're very transparent. Like it's a seasonal business. Dubai has an off-peak season and a peak season. What are those seasons? Summers is an off-peak season okay because of the temperature. People are at school holidays. People like to go back to their home country. It's not that tourists are not coming in. They are. But we obviously see a dip. And then October onwards till about March, April, we know how New Year's is. We recently had Camel Food and the other exhibitions. Dubai was full. You're talking about numerous amount of buildings and lots of supply, but the buy was full. We were getting calls from people saying, I'm ready to pay any amount you want, but we need a place to stay. You know, that's the kind of market we're operating in. But people do need to understand that you will not have 100 percent occupancy across a year. That's impossible, yeah? Okay, and it is seasonal, exactly. But on a year-end average basis, we look at between 68 to 75 percent occupancy. That's what I was looking for. And Dubai just got ranked for the third year in a row as a top global destination by TripAdvisor. And with what is happening here, like, for example, the casinos that are being built, what's happening in Ras Al Khaimah, and just the whole draw of, let's say, World Expo, COP 28, and just what is going on, it is going to continue. The world's largest airport being built, Al Maktoum. It's not slowing down. I've been in Dubai for almost seventeen or eighteen years, okay? I've been in hospitality for close to ten years, okay? Every year you would have something new. You would have exhibitions. You would have certain events going on. Just imagine a World Cup going on in another country, and it's like Dubai is going to get punished for it, yes, because this is the entry to that, right? And Dubai is really where East meets West. So it is the entry point to the east for those that are coming from the West. For even other events happening there, there's also a significant factor of the airline Emirates. My favorite. So people, if you fly Emirates, you fly one of the finest airlines of the world, okay? Now, if you take Emirate, you have a transit in Dubai, and people like, okay, if I have a transit, I might as well just stay for a day or two. Exactly. Like, if you're going to the Maldives, for example? Exactly. You stop here first, yeah, yes. So you see, these factors are always there. And like you mentioned, there are events. There is some activity or something or the other always ongoing, right? You mentioned about Ras Al Khaimah. I've actually worked in Ras personally. Beautiful, it's gorgeous there. It's amazing. The kind of vision His Highness has over there is amazing, yeah? And this is not an overnight thing. They have worked super hard for it. The authorities, the local development, everything. If you go to Ras six years back and you go now, you'll see a significant change. And in the coming four or five years, you will see a totally different emirate. And then there's the vision of the whole area, right? The master plan, always looking a decade or two decades in advance. So the demand is there. The numbers prove the demand, yeah? Um, talk a little bit about just in comparing America and Canada. The restrictions are very heavy with regards to not being able to enjoy profiting off your investment property with short-term rentals. And so much of the United States and Canada. But we come here and they want you to make money, yeah? So it's all regulated. We are registered in the Dubai Tourism Authority. We are a holiday home company. Each of our units is registered individually, okay? We have a unit permit for each of our properties, okay? So you handle that? So when my client comes and purchases a property and they want to hand it over to you to manage it for short-term rentals, you're the one that handles the securing of the permits for that? Correct. So we handle a to z everything for them. Fantastic. And yeah, walk us through that whole a to z as well. Sorry, but yes, I want to know definitely about the regulations and then walk us through the steps. Sure. So talking about DTCM, so you obviously have the holiday home permit for each of our properties. You go outside the property, there's a barcode which is mandatory if that unit is being operated under holiday homes. We pay tourism tax. So everything is regulated. Each of our guests is registered with their IDs in the building and along on the DTCM portal as well. There's a new system which is coming in place by the security authority along with DTCM. So they will have all the details of the guest. So you're regulated. You're safe. The owner is actually more secure after getting the DTCM permit, okay? Because that secures the management company and the owner. Because we register all the guests, all the details of the guests are collected by us. They are liable to follow the rules. Once we get into the detail of how the short-term management part works, but all these things are super regulated. And it's an annual permit which is renewed. It's not that you get a permit for four or five years. It's each year you need to renew the permit. You need to submit the owner documents. And the best thing is the owner signs the form. It's not that we as a company can just take over a property and do it, okay? It is the owner with full authority who signs the authorization form that allows Proper Luxury Homes to manage my unit. Fantastic. There's a nightmare story I don't know if you ever heard about it in LA, where the Airbnb guest wouldn't leave. So that's what I said. The DTCM permit for the guest as well secures the owner, secures us. Obviously, there are certain regulations and steps we need to follow. The first thing is when a guest is registered, they are registered in the building for their dates, okay? Once the checkout date approaches, the access card will stop working. Got it. That's the big first thing, okay? Touch with, we have never had a bad experience, okay? Good. There are companies who have had experiences here. In the way we do things, we have not, okay? You know, we thank God for that. But obviously, the building security, that's our first step, yes. The second step is we personally go in, speak to the guest, see what the reason is, what's happening. Maybe they need another place to stay, we relocate them. Or maybe they have some other issue or something. So we're always there. So look, it's a customer-oriented business. We need as much as the customer. And these things might be that's your role. I mean, you're managing it. You're servicing it. So I'm living in San Diego. I hand this job responsibility over to you. I do not need to worry about getting on an airplane, come handle it. From submitting for the permit, from marketing the property, and I would love for you to share about the marketing of the property to then, you know, submitting the guest that's going to be there, inspecting the property in between, and then crisis management, right? Okay, I will need a few minutes from you. Okay? And I will run you through the full process. Yeah, let's go. The reason why I have gray hair, okay? Okay. I actually don't see any gray hair, okay? Yeah, the makeup, the lighting is pretty nice. So let me start from the first step, okay? Okay. The very first step is the owner reaches out to us saying, in a scenario that I have a property, will you manage it for us? Okay? We work on the revenue projection sheet for them. Now we share it across with the owner. That if you put it on long-term lease, this is what you're going to get. And if you put it on short-term lease, these are the returns you're going to get. We are very transparent on that. Fantastic. So strategic and helping them already understand that revenue generation. I love that, absolutely. So look, it's your baby. It's your asset. You really want to know how much you're going to make, okay? And our projection sheet is month by month, giving you the average daily rate, occupancy, expected expenses like utilities, your permits, any maintenance cost. Anything all that is covered up in that revenue sheet. That's the first step for us. One we send it across to the owner, the owner says yes, I agree to this and let's go ahead. We work on a management fee basis, which is a revenue share model. So we obviously agree on the fees with them. That this is our management fee. And then we go over to the next step. We take fully furnished units on board. If the unit is not furnished, we have designers who would furnish the unit for you. Amazing. Now we had a few clients who bought the property, never visited Dubai. We furnished the property for them, got their approval on how the design would work over a Zoom call. We applied all the permits for them. We applied all the utilities for them. Everything was done by us. So that caters to the part that you don't really need to come into Dubai. You can just hand it over to us. We manage everything for you. On board the property. Once the property is furnished, we list it across all the major online platforms. The owner has a dedicated client relations manager with us, what we say a property manager. So you have any questions about the rates, anything about the bookings, the reviews, the owner has unlimited stay for their own property. I was going to ask that, okay? So they can make their booking on the client's own or they can reach out to the property manager. That I'll be coming in on so and so dates. Can you block the units for me? The part about, so we have the next two steps. One is the transparency part and how the owner keeps himself up to date, okay? We have a dedicated client zone. We are a lot into tech as a company. We are the only ones in the region to have direct API integration with Airbnb. Oh wow, and region. I mean, the MEA region. So you're talking about a huge region over here, okay? Okay. So that obviously helps us a lot. And that in our tech part, which is a tech managed internally, everything enables us to perform better. Now, the client zone gives you a full detail about your property from your expenses, your daily rate, your current bookings, your past bookings, how much you're making on that booking, how much is the platform fee which is being charged to you, any expenses which are being incurred on your behalf. You can see the original invoice for it. We attach the original invoice for it along with that. You can see your statements, monthly statements on the portal itself. So you don't even need to call in your property manager. A lot of our clients, we manage very high-profile clients as well, and they don't have time to call up the property manager every time. They just log into the client zone and they'll just drop us a message that, hey, I have this question, please let me know what this is about, okay? We, once everything of that is done, the listing is done, we do in-person check-in for all our properties. Fantastic. No matter what time it is. I have done check-in at three in the morning myself as being the general manager. As a company, we have a policy as well that each of our departmental heads, including South Africa, has to do a check-in per month, okay? So you get to see what the state of the property is okay? Before the check-in, we do an inspection that's done on our app. We call it, before each guest checks in, you inspect the property? Absolutely, absolutely. So in our words, we call it a 25-point checklist, but it's like a 50-point checklist, okay? So we basically check everything in terms of how the linen is, is the linen ironed properly? Is it crisp and clean? Are the towels clean? Are all the amenities placed in? How many plates are there? How many knives are there? How many spoons are there? Every detail is checked, and it's actually documented, okay? And you take a picture for it, okay? You can upload a picture, okay? So for example, a guest comes to me tomorrow and says, hey, this was not there, this was missing. I can always refer back to my checklist and see who did the checklist, and it will be pictured and documented, okay? Once the guest checks out, we do another inspection which is called the cleaning checklist, which is even more detailed than the first one. Take pictures of the oven, take pictures of the fridge, the refrigerator. We check in all the bulbs, all the lights. We check if there are, obviously, we have to check the damages part. You know, if there's any stain on the carpet or anything is damaged by the guest, all these things are covered by us. So may I interrupt you there if I may? How do I ease my investor's concerns back home that if there has to be maintenance, product something fixed in between, that they're not being gouged at the fee to replace or fix a product or an issue? Since they are across the world and can't get on an airplane over here to make sure that they're not being, I hate to say it and I don't want to assume something negative, but this is actually a real true concern, being taken advantage of since they are on a different continent. Absolutely. So as per our contract, we obviously have a certain amount of threshold approval from the owner. That up to this amount, you can go ahead with the work, okay? Now, if there's something major, we get two to three different quotations for the owner. We send it across to them along with our comments. That this company is cheaper, but their quality isn't great, okay? We have this company who's charging you more, and we work with them very closely. Can we go ahead with this one? Once the owner approves and the work is completed, we go and inspect everything. Great. Before releasing the payment to the vendor. Great. Okay. So if I'm not happy with the work, I will send in the vendor feedback and they will come and fix it again without that. They're not getting paid. If it's an issue that has to do that that's covered under warranty for the developer? Because we're working with mostly off-plan projects that would be brand new. So something covered under warranty, may I feel comfortable knowing that you're going to communicate with the developer okay? Great. Like for example, Emaar. You have the DLP period of one year, yes, okay? We are registered on the Emaar portal, okay? All our properties which we manage in Emaar buildings are registered under one portal. Okay. We reach out to Emaar. That, uh, for example, the AC is not working and we have the coverage for it. Can you please schedule an appointment, right? Look, the owners don't need to do anything in that. That's what I want to keep hearing, right? That's beautiful music to our ears as investors. I am charging you a certain management fee, okay? My job is to maximize your revenue. And that, how a lot of people will say, like, what's your stake in this? I work on a revenue share basis. So if you make money, I make money. Fantastic, okay? Emaar is your brand awareness is important. Your reputation, because you want to continue to build your reputation. And Dubai is not, it's small. Everyone knows for sure. And like I said, we have global presence. We are operating in three continents. We're in South Africa. We're in Dubai. We're in Lisbon, okay? We're managing close to approaching on 1,000 units now. So we, a lot of our introduction of new properties, come through our existing owners. Fantastic. Because of the kind of service we provide, the kind of ease of mind you have, you know, all these things are the best thing for a person who has invested an x amount of money, okay? And they're based abroad. They have bigger things to cater. And like, okay, there's someone who's taking care of my baby for you. And they're getting paid monthly. So we generate our statement, seventh of each month. And the statements are, sorry, the statements are sent sixth of each month, and the payment is done on the seventh. I don't recall a single day where we have delayed a payment. Fantastic, okay? And that's something which guarantees everything for the owner. Fantastic. They, you've answered so many of the questions I asked. I will ask you a couple more. What have been the top five performing Airbnb areas in Dubai in the past year? Okay. Blue Waters has been number one, okay? It's done phenomenal. Downtown has been, has been great. Palm. I would say Palm would be number two, okay? Palm would be number two. And then Tanteen would be number three, okay? Reason I say that, there's Tanteen. It's massive in terms of the variance. You're connected to the mall. You're slightly close to Business Bay. You're slightly close to Downtown. Tanteen would be number three. And then you have Marina and JBR as the next following. We recently started off in Dubai Creek Harbor. Beautiful area. It's amazing, gorgeous. And we started off in District One as well. We recently got five units over there overlooking the Lagoon. It's an upcoming area, yes, but the views are phenomenal. The accessibility is amazing because you're directly on the highway and then downtown is just ten minutes away. So something I don't know if I mentioned already, we operate in prime areas only, oh I see, okay? Only towards the luxury segment: downtown, Marina, JBR, Tanteen, Blue Waters, and others. Right. Because for example, Expo City, right now we know that once those residences are ready in a couple of years, that is going to be a very hot area for Airbnb, right? So like I said, we are very transparent with our clients from day one. We started off Creek Harbor much later. We started off District One now. It doesn't make sense for me to tell the owner, oh yeah, you're going to make money, I sign up with them just to increase my portfolio, but I'm not generating anything for them. So we take it step by step. An area which we see has a touristic demand, like you mentioned about Expo. So any area which we see an increase in demand, we would expand into that area. Expanding into the area, we also have in the pipeline of expanding into Abu Dhabi soon. Amazing. So that's that's again something which you, what about Ras Al Khaimah? Are you in Ras right now? So it's going to be Abu Dhabi next. At the moment, that's what our plan is. And then we get Ras Al Khaimah. Okay? That's very good to know. Thank you for this incredible information. I'm sure we will be talking very often. I am so glad to have been able to sit down with you to answer these questions. It's very important because most of the people I'm catering to aren't necessarily moving here. But they are investors, and they are looking to maximize on the short-term rental return opportunities here in Dubai. So with that, I will say thank you again and make sure to subscribe to The Dubai Connect podcast. We are on YouTube, Apple Podcasts, Spotify, and more. And stay tuned for our next episode. Thank you. This is season two of The Dubai Connect podcast.