Rental yield is a year's rent divided by what the property cost you. Gross yield uses rent alone; net yield first subtracts running costs such as service charges, maintenance, management, vacancy and insurance. For a Dubai property, take rent evidence from the DLD Rental Index and registered rents, and cost evidence from the Service Charge Index, not from adverts.
Rental yield tells you how much rent a property earns each year compared with what it cost you. You work it out by dividing annual rent by your total cost to buy. Gross yield stops there. Net yield first takes off the costs of owning and letting the property, which makes it the number to plan with.
This guide shows both methods, the costs that are easy to miss, and where to find official evidence for each input. It does not give yields for any area or building. Those change, and the inputs belong to the property you are looking at.
The gross yield formula is:
Gross yield = annual rent ÷ total cost to buy × 100
“Annual rent” is the rent a tenant would pay for a full year. “Total cost to buy” is the purchase price plus the one-off costs of buying, such as the Dubai Land Department registration fee of 4% of the property value and the other fees covered in our guide to the full cost of buying off-plan.
Gross yield is quick, and it is useful for a first comparison between two units. It ignores everything you pay while you own the property, though. Two flats with the same rent and price can leave you with very different income once service charges and other costs are taken off.
Net yield uses the same idea, after costs:
Net yield = (annual rent - annual running costs) ÷ total cost to buy × 100
The running costs to include are:
If you use a mortgage, interest is a cost too. Many investors work out net yield before finance first, then look at cash flow after mortgage payments as a separate step.
With an off-plan purchase, there is no rent until the building is complete, handed over and let. Keep three points in mind:
Use official records of what tenants actually pay, not asking prices.
Our guide on reading Dubai property data walks through these tools in more detail.
Service charges are a running cost you pay whether or not the unit is let, and they differ from one building to the next. The DLD / RERA Service Charge Index returns the rates approved by RERA for a project by usage and year, or for a specific unit by its title deed. Use the rate for the building you are considering, not an average.
For other costs, ask for written quotes: a property manager’s terms, an insurance quote and a realistic maintenance allowance. Note each figure’s source so you can check it again later.
Example only
The numbers below are round, made-up inputs chosen to show the arithmetic. They are not typical values and do not describe any property, area or market in Dubai or anywhere else. They carry no currency so that they cannot be read as prices or rents.
Example inputs:
| Item | Example value |
|---|---|
| Total cost to buy (price plus one-off costs) | 1,000,000 |
| Annual rent | 80,000 |
| Service charges per year | 12,000 |
| Maintenance allowance per year | 4,000 |
| Management and letting per year | 5,000 |
| Vacancy allowance per year | 6,000 |
| Insurance and tenancy admin per year | 3,000 |
Example gross yield: 80,000 ÷ 1,000,000 × 100 = 8, so 8 per cent.
Example running costs: 12,000 + 4,000 + 5,000 + 6,000 + 3,000 = 30,000.
Example net yield: (80,000 - 30,000) ÷ 1,000,000 × 100 = 5, so 5 per cent.
In this example, running costs remove more than a third of the gross figure. That is the point of the exercise: the gap between gross and net is often where a decision changes. To try your own inputs, use our rental yield calculator.
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Gross and net yield from your own rent and cost figures.
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There is no single good figure, and we do not publish one because yields change with prices, rents and costs. Judge a yield against your own costs, financing and goals, and against what you could earn elsewhere with similar risk. Check current rents for the specific building on the DLD Rental Index and in DLD's registered rent data before you decide.
Gross yield divides a year's rent by what the property cost you and ignores running costs. Net yield first subtracts the costs of owning and letting the property, such as service charges, maintenance, management fees, an allowance for empty periods and insurance. Net yield is always lower and is the better guide to the income you actually keep.
Dubai Land Department publishes the Rental Index, which shows average rents for an area and property type, and its Real Estate Data service, which lists registered rental contracts with their annual amounts. The Rental Index is also in the Dubai REST app. Use these instead of asking prices on listing sites.
Yes. Service charges are paid by the owner every year, so they come straight off your rent when you work out net yield. Look up the rates approved by RERA for the specific project in the DLD Service Charge Index rather than estimating them, because they vary between buildings.
Official sources used on this page. Each was checked on the date shown.
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