Buying Property in Dubai: Insights from an Airbnb Host
At Home It Better, our goal is to help you navigate buying property in Dubai with information, good information. And what better way to enhance your chances of success than learning from real-life property investor and Airbnb host who has already achieved results?
Meet Dubai Property Investor – Kristina Bazzy
Kristina and her husband currently own 4 apartments in Dubai.
They have 3 properties in Jumeirah Lakes Towers (JLT) and 1 property in Al-Furjan. They are renting these out and are seeing great rental yields. The two-bedroom apartment brings in a net ROI of 8%, while the one-bedroom apartments are even better with an average 12% net ROI.
We chatted with Kristina about how she got into buying property in Dubai and what steps she took to build her successful rental property portfolio.
And besides being an Airbnb host, Kristina also runs Urban Uplifts where she offers maintenance, renovation, furnishing and staging services to help increase properties value and rental income.
“Our experience showed us that renovating properties can significantly boost profits, especially in prime locations with older buildings. That’s why we decided to offer these services at a reasonable price, so that investors can avoid the high costs typically charged by interior design firms.”
1. What initially attracted you to property investing?
My experience as a senior financial analyst for real estate projects and my BA in entrepreneurship played a role in setting me on this journey.
I also come from a background with this property investing mentality. My father constantly bought land to either sell or develop, keeping minimal cash in the bank.
He retired early because he had a high income from selling real estate, which inspired me to invest in rental property as well.
However, my husband and I adopted a different investment strategy because we never had the budget to buy land or develop large-scale projects.
Instead, our business model focuses on buying property in Dubai with a focus on affordable apartments in prime locations. We then upgrade and furnish them attractively to draw tenants or guests willing to pay a premium, and use the rental yields generated to help repay our loans.
2. Have there been any significant shifts in your investment strategy over time?
Initially, we bought a large two-bedroom apartment in a high-end building but soon realized that higher returns were in one-bedroom apartments that were better priced and had lower service charges.
3. Do you have specific criteria when considering a property investment in Dubai?
Location is crucial. Apartments near metro stations will get you premium prices, particularly those within walking distance to office buildings.
Also, buying in new and significantly more expensive buildings doesn’t make financial sense in terms of ROI or capital appreciation.
I believe that it’s more profitable to purchase a reasonably priced, average property and improve it, rather than buying a new, expensive property that won’t yield as high returns.
4. Is Airbnb more profitable than renting? And is your Airbnb business really worth the extra workload?
Short term rentals used to provide significantly higher rental yields for us. But, given the current market situation, long term rentals are becoming equally lucrative due to the high demand.
Right now, there is an oversupply of apartments for short term rentals. This competition is driving the prices down, which was negatively impacting our ROI.
Because of this, we decided to transition our apartments into long term rental property.
5. How do you assess the profitability of an Airbnb property? Are there specific metrics or indicators you rely on?
The profitability and success of apartments near metro stations mainly depend on its location, its size and layout, how it’s styled, furnished and staged, whether it’s been renovated, the apartment reviews and ratings, and any special features that make it stand out.
6. How do you price your Airbnb properties and optimize occupancy rates?
It is important to list the property on various platforms rather than just relying on one.
Unfortunately, it was not enough to list our properties only on Airbnb.
Pricing involved constantly checking the market and pricing our flats at a slightly higher rate.
7. How do you market your Airbnb properties to attract guests?
I add a lot of thought and tasteful details to the apartments that guests appreciate and that the market lacks.
This offers a competitive advantage that allow us to price our properties higher.
8. Do you handle the Airbnb yourself, or do you work with a property management company?
When we had them as short term rental, I managed them myself because I knew that no company would care about our properties or guest reviews more than me.
As an Airbnb host, I had only received 5* reviews because I always went the extra mile for my guests.
9. In your opinion, what are the biggest opportunities and challenges facing Airbnb investors in today’s market?
The competition for short term rental is very high and it is becoming more and more difficult to get high occupancy for apartments especially during the low season.
And, managing short term rentals is very time consuming and needs a lot of attention to detail.
Finding a good company to manage your Airbnb business is tough too. Many companies either drop rates a lot to boost occupancy, don’t take proper care of the units, or have poor customer service.
Having said that, Airbnb business is a good option if the owners plan to live in their property part of the year or want to sell it, as having long-term tenants means owners will need to give them a one-year notice to move out, which may make selling the property more difficult.
10. What advice would you give to someone considering starting an Airbnb business in Dubai?
I really believe buying property in Dubai is a solid investment. Whether your rental property is an Airbnb business or a traditional lease, it’s always a good idea to conduct a proper analysis beforehand. Of course, there will always be fluctuations in any market but in the long run, it will always appreciate and can generate a passive income, helping you achieve financial independence.
