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As far as the eye can see, in the city of Dubai, you will find individuals working on their dreams, enjoying the city’s beautiful landscape and striving to create a bright future. These individuals come from many foreign countries. However, a common challenge they face is accommodation. Hotels in Dubai can be expensive, and many seek more affordable options. A perfect solution to this need is bed space. The bed space business in Dubai has become a popular venture for entrepreneurs looking to capitalize on the city’s growing demand for affordable living arrangements.
This comprehensive guide is tailored for anyone looking to enter this dynamic market in Dubai. You will get information about its process, requirements and valuable tips for success.
Let us start by understanding the business model itself. The bed space business is essentially a rental model where you provide sleeping areas within a room to those who need it. The size of the sleeping area is typically around 1.62 meters—compact yet comfortable for occupants seeking affordable accommodation in the bustling city of Dubai. These spaces are part of a larger shared room, where occupants also share common facilities like bathrooms. Such Dubai partition rooms are ideal for students, singles, explorers, workers, and anyone else looking for cost-effective living options.
The demand for bed space rentals is very high in Dubai. The market for bed space in Dubai is growing tremendously, with many players entering to provide such services. The reason for increase in demand for such services is clear. There are countless individuals moving to Dubai for better prospects, whether for education, jobs, or simply exploring the city. In an expensive city like Dubai, having a comfortable space without paying high rents is a top priority for many. For examples, students studying in UAE educational institutes would need such accommodation. Similarly, someone on a job hunt in Dubai would love having a cozy resting place that is not heavy on their pocket. For such individuals, bed space rentals are the perfect fit and you as an entrepreneur can tap into this huge opportunity.
Moreover, this business does not require a huge investment. Multiple beds can be accommodated in a single room, and as a landlord, you can earn maximum returns on your property. You can also include special features such as meal plans, transportation services and internet connection facilities, increasing the overall appeal of your space. With time, as your business grows, you can acquire additional properties or move to new locations, thus diversifying the revenue stream. The market for the bed space in Dubai is only expected to increase day by day, making it one of the easiest yet most profitable opportunities in Dubai.
It is very important to know that any kind of property rental business in Dubai is governed by Law No. 26 of 2007 and Law No. 33 of 2008. Below are the general requirements that must be met and considered when starting and running a bed space business in Dubai:
You must enter into a standardized rental contract with the tenants to avoid any disputes. The contract must clearly specify the terms and conditions of stay and must be registered with the Dubai Land Department.
Rules related to the maximum number of tenants in a room, rent rates, sanitation standards, fire safety, room maintenance and other standards must be diligently followed.
Obtaining trade licenses and permits is just the beginning. To stay legally compliant, your business must ensure that these licenses are renewed in a timely manner.
Note: A tenant cannot sublease or share the property with others without obtaining the landlords written consent as stated in tenancy contract.
Here is how to start a bed space business in Dubai:
The foundation of any business is built on strong research. Before embarking on your business journey, it is essential to conduct in-depth market research that will help you understand the demand, competition, and target audience. Study the demand for bed space in Dubai, identify which locations have higher demand and determine your potential target groups, such as students, working professionals, etc. Also, understand who the major competitors are and how they are running their businesses.
After thorough market research, you will gain clarity of thought and be able to jot down those ideas into a concrete plan. A business plan must be prepared well, with clear divisions that serve as a roadmap. It should highlight your business vision, mission, services you will offer, including bed space rentals, goals, financial projections, costing, target customers, strategies, and every other essential detail. The plan must also include an operational section, outlining day-to-day operations, property management, and more.
Next, you must decide where in Dubai you would like to operate in a freezone or on the mainland. Both of these jurisdictions have their own advantages and laws. There are several freezones in Dubai where you can start a business and enjoy 100% ownership. Similarly, mainland business setup is also a popular choice, offering unrestricted trade throughout the nation.
Next, you must identify the ideal property for your bed space business in Dubai. This step is crucial, as the property itself is the foundation of the business. You can either lease the property or purchase one depending on your preference. Here are certain things you should consider while selecting the property:
Location: The property must be located in an ideal area, close to schools, workplaces, transport services, business hubs or parks. It should be in well-connected areas, as location is essential for the overall appeal of your space offerings.
Property Size: The size of the Dubai partition room dictates how many occupants it can accommodate. The larger the property, the more tenants you can cater, leading to more revenue.
Condition: The property should be in good condition and must meet all the health and safety standards mandated by the government.
Once you have selected the property, the next crucial stage is applying for the business license and obtaining the necessary approvals for your business setup in Dubai.
Additional Approvals: Based on the nature of your business, you may need to get specific approvals from government bodies, such as the Land Department and Dubai Municipality.
Business License: You will need trade license to operate your business legally in Dubai. It will be issued by the DED (Department of Economic Development) for mainland businesses or the relevant authority for freezones. You will need to reach out to the authority, submit the required documents, pay the fees and provide other necessary documents which may include your business plan, tenant contracts for the property, passport copy, all approvals, ID documents, bank reference, and an NOC (No Objection Certificate) from the property owner if applicable.
Once you submit the application, it will be reviewed, and you will receive your business license.
After obtaining the business license, it is time to set up and prepare the property to be rented. In this step, you will need to be mindful of Dubai’s rental regulations as well. While setting up the infrastructure for your bed space business in Dubai, consider these key points:
Safety Measures: You need to install proper fire safety systems, such as fire alarms, extinguishers, and emergency exits.
Space Design: To ensure privacy and comfort for tenants, you may need to create partitions within the room.
Utilities: Proper sanitation must be ensured, including water supply and bathroom facilities. Electricity should be reliable and available, and the space must be kept clean and well-maintained. For water and electricity, you will need to register with DEWA (Dubai Electricity and Water Authority).
Amenities: The space must be convenient and comfortable. Amenities such as charging points, internet access, easy check-in, security and surveillance, landline phones, etc., should be provided as needed.
Furniture Setup: The space should have durable, good-quality furniture such as bedding as you must provide comfort to the tenants.
You must devise strong and clear contracts for the tenants, clearly outlining the terms and conditions of renting, payment schedules, house rules, deposits, and other rental agreements. The contracts you create must comply with the laws of Dubai, as regulated by RERA (Real Estate Regulatory Agency).
Now comes the interesting part: telling potential customers about your business. Once everything is set up, you will want to make your presence known to attract clients. Leverage various marketing channels, such as social media advertisements, online platforms, collaborations with local universities, colleges, corporations and agencies—whatever it takes to showcase your offerings and competitive pricing. Your goal must be to differentiate yourself from competitors and highlight why your target audience should choose you.
The focus of your room partition business in Dubai should be the satisfaction of your customers. You must have an excellent customer support system in place through which your tenants can reach out to you. Always communicate with them, take their feedback and address any grievances or inquiries promptly. The property must be maintained to their highest satisfaction. Additionally, make sure to stay compliant with health and safety standards and never step back from improving your business.
The total cost of starting a bed space business in Dubai includes following expenses which you should know for better financial planning:
Here are some useful considerations for running a successful bed space business in Dubai:
In today’s modern business era, having a strong digital presence is of great importance. For increased visibility and brand presence, you should use digital marketing strategies such as SEO optimization, website content optimization, social media marketing, PPC marketing, etc. Using multiple channels can be a great option for a bed space business in Dubai to reach more customers.
At the end of the day, customers want value for the money they are paying. Therefore, your business should be able to deliver superior value to customers, especially when compared to competitors.
Dubai is home to a well-developed business community, and you should take advantage of it. It can indeed be a strong marketing strategy. Connect with nearby businesses, participate in events, and engage in trade shows or exhibitions. This will improve your brand’s profile and credibility.
Create experiences for customers they cannot forget. Especially in sectors like the bed space business, this becomes even more important. Ensure your staff treats guests nicely and addresses all concerns. A customer feedback system can be implemented to help create tailored experiences for your customers. Regularly collect feedback and find ways to improve the service.
The living space must be well-maintained. Proper cleaning of the space, facilities, and working areas is crucial, as it is the foundation of comfort for your customers. On top of that, keep the space safe and sanitized. Make sure the furniture is in top condition.
Make sure your finances are on the right track. Accurate rent payments, service fees, deposits—every aspect of each transaction should be carefully monitored and recorded. Knowing where you are spending, your costs, and your profits is essential for maintaining a healthy business.
Many property owners in Dubai choose to rent out their properties as a way to generate supplementary income. With the increasing inflow of students, tourists, business and working professionals in the city, the demand for affordable yet comfortable accommodation is on the rise. While there is no officially licensed activity for ‘bed space’ in Dubai, many individuals pursue housing venture through renting rooms to multiple tenants. However, it is important to note that pursuing such business may have legal implications. That is why, we recommend consulting relevant government authorities to ensure compliance with local regulations. Please be aware that any actions taken in this regard are solely at your own discretion.
For staying updated on regulatory framework of UAE for businesses, you can consult legal expert at Dubiz Business Setup.
Yes, given the increasing demand for pocket friendly accommodation services by the students, workers and other individuals in the city, bed space business is one of the profitable business ideas in Dubai.
The average monthly rent that can be earned by a landlord on 1 bedroom apartment is around $3,400 in Dubai.
Through a bed space business in Dubai, you can target students, working professionals as well as those on short trips in the city.
RERA (Real Estate Regulatory Agency) is responsible for overseeing and enforcing the rental regulations in Dubai.
Renting properties and apartments in Dubai is easy but requires proper planning and preparation as well as compliance with the legal regulations. The city is one of the best and most lucrative destinations in the world for such business.
