Guide
Gross vs net rental yield in Dubai, and why the gap matters
By Reem Al Khatib, founder, Yield Properties (RERA ORN 48756) ·
The yield on a listing is almost always gross: the annual rent divided by the price. Your actual return is the net yield, after the costs of owning the property. In Dubai the gap is often 2 percentage points or more, so a "7% yield" can easily turn into 5%.
The two formulas
Gross yield = annual rent ÷ purchase price × 100
Net yield = (annual rent − annual costs) ÷ (purchase price + buying costs) × 100
What comes out of the rent
- Service charges. Usually the biggest cost. They're set per square foot and vary a lot by building, from around AED 10 to over AED 25 per sq ft a year in mainstream areas. Check the building on the DLD Service Charge Index before you buy.
- Maintenance. AC servicing, repairs, and replacing appliances between tenants.
- Management. Usually around 5% of the rent if someone manages it for you.
- Empty months. Even a good unit can sit empty for a few weeks between tenants.
- Landlord insurance.
You pay the buying costs only once, but they're part of what you paid, so they count too. See what it really costs to buy property in Dubai.
Worked example
Illustrative figures for a one-bed in a mid-market area, bought in cash.
Purchase price
- AED
- 1,500,000
Buying costs (4% DLD, trustee and title deed, 2% agency + VAT)
- AED
- 96,280
Annual rent
- AED
- 110,000
Service charge (800 sq ft × AED 15)
- AED
- −12,000
Maintenance
- AED
- −3,000
Landlord insurance
- AED
- −1,000
Management (5%)
- AED
- −5,500
One empty month
- AED
- −9,167
Net rent
- AED
- 79,333
| AED | |
|---|---|
| Purchase price | 1,500,000 |
| Buying costs (4% DLD, trustee and title deed, 2% agency + VAT) | 96,280 |
| Annual rent | 110,000 |
| Service charge (800 sq ft × AED 15) | −12,000 |
| Maintenance | −3,000 |
| Landlord insurance | −1,000 |
| Management (5%) | −5,500 |
| One empty month | −9,167 |
| Net rent | 79,333 |
Gross yield: 7.3%. Net yield: 5.0%.
Same apartment, same tenant, and the return is a third lower than the listing suggests.
What to do with this
- Compare properties on net yield, not gross. A cheaper building with high service charges can lose to a more expensive one with low charges.
- Ask for the actual service charge for the building, not an area average.
- Be honest about empty months and maintenance. Leaving them out is how a 7% listing turns into a 4% investment.
Want to run your own numbers? Our rental yield calculator shows gross and net side by side. Or talk to us about a specific property.