Tools · Dubai
Rental yield calculator
Gross yield is the number every advert quotes. Net yield is the number you bank. Put your figures in and the calculator shows both, along with what the property returns in a year and how long it takes to pay for itself on rent alone.
The property
6.67%
Gross yield
Rent ÷ price. The number every advert quotes.
5.67%
Net yield
After the costs above. The number you actually keep.
AED 85,000
Net income
Per year, once the costs come out.
17.6 yrs
Payback
To earn the purchase price back on rent alone.
On AED 100,000 of rent, AED 15,000 goes out in charges. Void periods, agency fees on each new tenancy, and any mortgage are not in these figures.
The method
Two sums, and the gap between them
Gross yield divides a year of rent by what you paid: a property bought for one million dirhams that rents for seventy thousand yields 7%. It takes ten seconds and it is the figure quoted in almost every listing, brochure and investment deck in the city.
Net yield takes the same rent, subtracts everything the owner pays to keep the property rented, and divides that by the price instead. The service charge is the big one and it is charged per square foot, so a large apartment in a building with a pool, a gym and a concierge can hand back a meaningful share of the rent before you see any of it. Add management fees, chiller registration and maintenance and the gap between the two numbers is rarely small.
Neither figure includes what it costs to buy — the 4% Dubai Land Department transfer fee, the agency commission, the mortgage arrangement fee. Those are one-off, so they do not belong in an annual yield; they belong in how long the investment takes to break even, which is why the payback figure here is worth more attention than most people give it.
What comes out
The costs that decide the net figure
- Service charge
- Billed by the building’s owners association, per square foot per year, to the owner and never the tenant. It varies enormously by building and is the single largest reason two properties at the same price return different yields.
- Property management
- If you are not in Dubai, or not inclined to answer a plumbing call at midnight, a manager takes a share of the annual rent to find the tenant, collect the cheques and handle the building.
- Chiller and utilities
- District cooling is registered to the property. Where the connection charge sits with the owner rather than the tenant it is an annual cost, and in some towers it is a large one.
- Maintenance and void
- Something breaks every year, and between two tenancies the property earns nothing while it is being marketed. A yield calculated on twelve months of rent quietly assumes neither happens.
- One-off, at purchase
- The DLD transfer fee is 4% of the price, plus agency commission and registration. These do not reduce the yield; they lengthen the payback.
Questions
What people ask about yield
How do you calculate rental yield?
Divide one year of rent by the purchase price and multiply by a hundred. That gives gross yield. For net yield, subtract the annual service charge and every other recurring cost from the rent first, then divide by the price.
What is the difference between gross and net rental yield?
Gross yield ignores costs; net yield subtracts them. Gross is useful for comparing properties quickly. Net is the one to decide on, because it is the money that reaches you.
What is a good rental yield in Dubai?
Yield moves against price, so the answer depends entirely on where you are looking: older, denser, more affordable communities return more on paper than prime waterfront addresses, which are bought for capital growth rather than income. Rather than trust a citywide average, compare the figure this calculator gives you against what units in the same building actually rent for — our community reports carry the recorded numbers.
Does the tenant pay the service charge?
No. In Dubai the service charge is the owner’s obligation to the owners association, regardless of who lives there. Tenants pay their own utilities, and in most buildings the chiller consumption, but the service charge stays with you.
Should I use the purchase price or the current market value?
Use the purchase price to judge whether the original investment worked. Use today’s market value to judge whether to keep holding it — on a property that has appreciated, the yield against current value is often much lower, and that is the honest comparison against selling and buying something else.
Do I include the 4% DLD fee in the yield?
Not in the yield itself, because it is paid once and yield is an annual measure. Include it when you work out payback: on a four percent fee plus commission, the first several months of rent go to covering the cost of buying.
The recorded prices and rents behind these questions live in the sales reports, and what is on the market today is on Buy and Rent.