Owning rental properties seems like a no-brainer for earning passive income, and while it’s not rocket science, there are certain cheat codes that can make your life much easier. Here are a few rules of the game we’ve picked up over the years that you must use as a landlord.
The Big Rental Index Question-The Savvy Landlord’s Guide
Now that the Dubai Land Department (DLD) has adjusted the rental index and is working on a more accurate version that considers data from similar units within the same building—a Herculean task, honestly—the burning question remains: Should you raise the rents on your tenants?
The Golden Tenant Rule
With over 1000 units under management at PrimeStay.ae, ranging from short stays and holiday homes to full-fledged yearly Ejari contracts, I have one vital piece of advice: if you have a good tenant and they’re within 20% of the index, don’t risk losing them. Seriously, a good tenant is rarer than a unicorn at a Bigfoot convention.
If you decide to raise the rent and lose that good tenant, chances are you’ll end up with an average tenant, which in landlord terms is just a fancy way of saying “potential nightmare.” After all these years of dealing with tenants of all stripes, I’ve learned that a good tenant is an anomaly. Think of it like winning a small prize at the local fair—not the lottery, but still worth hanging on to. Rolling the dice on finding a new tenant is a recipe for disaster. Plus, you risk having your unit sit empty for at least two months, which sort of defeats the purpose of raising the rent in the first place.
Now, if the rent difference is more than 20%, a good tenant will understand and work with you. Have a chat, reason with them, and you’ll likely come to an agreement. Don’t roll the dice on the wicked and vile tenants who lurk in the shadows. Some tenants can make you hate the very property you own. Trust me, it’s like having a good boss—it makes all the difference in the world.
Attracting Good Tenants
So, how do you make sure you attract good tenants in the first place? Upgrade your unit. It’s always an advantage for you as a landlord and as an equity holder. Just like any cosmopolitan city, Dubai’s buildings are aging, and the materials used for fit-outs are becoming outdated. You might think this will cost a lot, but not necessarily. There are many affordable options available now. We have an entire department that handles upgrades at minimal cost, from design to actual fit-out, including swimming pools and landscaping. These minor changes make all the difference, making your property stand out.
Embrace the Monthly Payment Plan
Adopting monthly payments is another smart move. According to our friends at Keyper.com, the demand for monthly rental payments is enormous, with 180 billion dirhams worth of yearly Ejari contracts in Dubai. Offering an easier payment plan attracts more tenants. If you need the rent upfront for other investments, consider the “rent now, pay later” program, where Keyper fronts the rent and collects installments from the tenant. It’s a win-win for everyone involved.
So there you have it, the savvy landlord’s guide to maximizing returns on your rentals. Remember, a bad tenant makes you hate the investment, and they are everywhere—watch out.
About Author
Hamzah Abu Zannad, the dynamic co-founder and managing director of Axiom Prime Real Estate Development, has spent over two decades shaping the skyline and community ethos of Dubai. With a visionary approach to urban development, Hamzah has been a pivotal figure in transforming residential spaces into vibrant, community-oriented environments that resonate with the warmth of Dutch-inspired living, seamlessly blending luxury with accessibility.
His tenure at Axiom Prime Real Estate Development is marked by innovative leadership, particularly in spearheading landmark projects within the Jumeirah Village Triangle and Jumeirah Garden City areas. A strong advocate for sustainability and the integration of cutting-edge technologies, Hamzah is committed to developing high-quality living spaces that not only promise luxury but also ensure a sustainable and inclusive community life. His efforts have positioned Axiom Prime Real Estate Development at the forefront of Dubai’s real estate industry, making it a beacon of modern living and community development.
Visit https://axiomprime.ae/ to know more.
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