Rental Yields in Dubai: Gross, Net and What Is Left

Rental yield is your annual rent divided by the purchase price. In Dubai, gross yields commonly run between 5 and 8 percent, but the net figure after service charges is what actually matters.

Gross against net, with a worked example

Apartment A looks better and earns less. That is the whole lesson: the advertised yield ignores the running costs, and running costs vary more between buildings than rents do.

Where the higher yields tend to sit

• Higher gross yields: the mid-market communities. Jumeirah Village Circle, Dubai Silicon Oasis, Arjan, Al Furjan. Lower prices, solid tenant demand.
• Moderate yields, stronger capital growth: Downtown, Dubai Marina, Business Bay, Dubai Hills Estate.
• Lower yields, trophy assets: Palm Jumeirah, Jumeirah Bay. Bought for the address and long-term value rather than income.

As a rule, the higher the yield, the more of your return depends on the property staying let.

What eats into the return

Service charges

The biggest single deduction, and wildly variable. See our guide to service charges.

Voids

Every empty month costs more than a modest rent reduction. Budget for at least a few weeks between tenancies.

Management

Around 5 percent of annual rent if you use an agent. Effectively unavoidable if you live abroad.

Maintenance

Air conditioning servicing, appliances, repainting between tenants. Small individually, and constant.

How to compare two properties properly

1. Get the actual achievable rent, not the asking rent of the unit next door.
2. Get the current service charge in writing.
3. Deduct management and a realistic void allowance.
4. Compare the net figures, not the gross.

Before you buy for income

Remember the purchase costs 6 to 8 percent on top of the price, which delays your true break-even by roughly a year of net rent. Our fees guide sets that out.

Ask us to run the numbers on a specific property, or browse what is available.