Rental yield in Dubai explained

Gross yield: the quick screen

Gross yield is a fast way to compare listings:

Gross yield = annual rent ÷ purchase price × 100

It ignores every cost, so it flatters properties with high service charges or frequent tenant turnover. Use it to shortlist, never to decide. Advertised yields are almost always gross, and often based on asking rents rather than achieved ones.

Net yield: what you actually earn

Net yield = (annual rent − annual running costs) ÷ total investment × 100

Running costs typically include:

• Service charges (check the current Mollak figure for the specific unit)
• Maintenance and repairs, including AC servicing
• Property management fees if you use a manager (property management fees)
• Landlord insurance
• Vacancy between tenants and letting costs
• Chiller charges where the landlord pays them

Total investment is the price plus buying costs — the 4% DLD fee, agency, trustee and other fees (buying costs). If you have a mortgage, investors often also calculate cash-on-cash return after interest, which is a different measure.

Worked example (illustrative only)

The figures below are hypothetical round numbers chosen to show the arithmetic. They are illustrative only and are not market data or a forecast for any area or property.

Imagine a hypothetical AED 1,000,000 apartment rented at AED 70,000 a year.

• Gross yield = 70,000 ÷ 1,000,000 × 100 = 7% (illustrative)
• Suppose illustrative running costs of AED 15,000 a year (service charges, maintenance, management, insurance and an allowance for vacancy). Net rent = AED 55,000 (illustrative).
• Add buying costs: the 4% DLD fee is AED 40,000 on this hypothetical price, plus other fees; say total investment of AED 1,060,000 (illustrative).
• Net yield = 55,000 ÷ 1,060,000 × 100 ≈ 5.2% (illustrative)

The gap between gross and net in this made-up example is the point: costs matter. Run your own numbers in the rental yield calculator.

Where to get real figures

• Rent: the RERA Rental Index on the DLD website and recent Ejari-registered rents for comparable units; our guide to the Dubai rental index explains it. A rental valuation gives a property-specific view.
• Service charges: the current Mollak figure for that building — see service charges explained.
• Prices: DLD transaction data; see reading DLD transaction data.
• Management and maintenance: written quotes.

What moves net yield

Rent caps under the RERA index limit how fast rent can rise on renewal for existing tenants, so do not assume rents reset to market each year (see rent increase rules). Buildings with extensive amenities often have higher service charges. Short-term letting can raise gross income but adds costs, permits and vacancy risk — compare in long-term vs holiday-home letting. For location choices, see best areas to invest in Dubai.

Common mistakes

• Comparing an advertised gross yield with your own net figure
• Using asking rents instead of achieved, registered rents
• Leaving out vacancy and letting costs
• Ignoring buying costs in the denominator
• Forgetting that yield says nothing about capital value changes