Rental Yield Explained: How to Calculate the Return on a Dubai Property
Rental yield is the annual rent as a percentage of what the property costs. It is the quickest way to compare one investment with another — provided you calculate it the same way each time.
Gross yield
Gross yield = annual rent ÷ purchase price × 100. An apartment bought for AED 1,000,000 and let for AED 70,000 a year has a gross yield of 7%.
Net yield
Net yield takes off the costs of owning and includes the costs of buying:
Net yield = (annual rent − annual costs) ÷ (purchase price + buying costs) × 100.
Annual costs usually include:
- Service charges
- Maintenance and repairs
- Property management, if you use a manager — commonly around 5% of the rent
- Letting fees and an allowance for empty weeks between tenants
- Landlord’s insurance
Worked example
Price AED 1,000,000 plus about AED 65,000 of buying costs. Rent AED 70,000. Service charges AED 12,000, maintenance AED 3,000, management AED 3,500, one empty month about AED 5,800.
Net income is about AED 45,700. Divided by AED 1,065,000, the net yield is roughly 4.3% — compared with a gross yield of 7%.
What pushes yield up or down
- Purchase price: the single biggest factor — which is why distress deals interest investors.
- Unit size: studios and one-bedroom apartments usually yield more than large units.
- Service charges: high-amenity towers cost more to own.
- Location: lower-priced communities often yield more; prime areas tend to offer lower yield but stronger demand.
- Furnished or short-term letting: higher income, higher costs and more work.
Yield is not the whole return
Total return is yield plus any change in the property’s value, and both can fall as well as rise. If you use a mortgage, calculate the return on the cash you put in, after loan payments.
Compare areas in our area guides and see what is available now in properties for sale.
Fees and rules change. Confirm current figures with the Dubai Land Department (DLD), your bank or your advisor before you commit — this guide is general information, not legal or financial advice.