Dubai rental yields: compare income after costs

Two apartments can advertise similar rental yields and leave their owners with very different income. Compare the price, rent evidence and running costs of each home before choosing a percentage.

Compare homes you would actually buy

Start with your budget and preferred community. An apartment in Dubai Hills Estate needs comparable rental evidence for its own building, layout and condition. A home in Dubai Creek Harbour needs the same checks; a waterfront address alone does not establish the rent.

For an off-plan purchase in Emaar South or Rashid Yachts & Marina, ask what supports the rental estimate and when the home is expected to be available to let. An estimate for a future home is different from rent collected under an existing tenancy.

Gross yield is the opening calculation

Divide annual rent by the purchase price, then multiply by 100. In a hypothetical example, AED 144,000 annual rent on a home priced at AED 2 million gives a gross yield of 7.2%. That assumes a full year of rent.

Calculate what remains

Suppose annual running costs are AED 36,000. Income falls to AED 108,000 before financing and tax. If the assumed purchase costs are AED 130,000, total capital is AED 2.13 million. AED 108,000 divided by that total gives approximately 5.07%.

These amounts illustrate the calculation. They are not a property offer, a standard fee schedule or an expected return. Replace them with the home’s actual price, service charges, maintenance, management costs and allowance for empty periods.

If borrowing, compare the mortgage terms separately. Loan repayments change cash flow; the example does not calculate the return on a deposit.

For a tenanted home, request the tenancy contract and payment history. For a projected rent, ask for dated, comparable evidence. Use the same method for every home on your shortlist.