Dubai Rental Yield and ROI for Investors
How investors measure Dubai rental yield and ROI: formulas, costs to include (DLD fee, service charges), a worked example and common mistakes.
Bellokey Editorial Team
Short answer: Dubai rental yield is annual rent divided by purchase price. A realistic return also deducts service charges, maintenance, vacancy and property management, and counts buying costs such as the DLD transfer fee. Calculate net yield and cash-on-cash return before comparing areas.
Rental yield formulas
Gross yield = annual rent ÷ price × 100. Net yield = (annual rent − annual costs) ÷ total cost of buying × 100. See the general method in gross vs net rental yield.
Costs to include for Dubai
- DLD transfer fee (4%, commonly paid by the buyer) and agency fee (often around 2%).
- Annual service charges, which vary by building.
- Maintenance, insurance and property management.
- Vacancy between tenants.
- Mortgage costs if financing: calculator.
Worked example (illustrative numbers)
Price AED 1,000,000; annual rent AED 70,000; gross yield = 7%. Buying costs of about 6% take the total cost to AED 1,060,000. Annual costs of AED 15,000 (service charge, maintenance, vacancy allowance) give net income AED 55,000, so net yield = 55,000 ÷ 1,060,000 = about 5.2%. These numbers are examples only; use real rents and charges.
ROI vs cash-on-cash
If you borrow, cash-on-cash return compares annual cash flow after loan payments with the cash you invested. See cap rate vs ROI vs cash-on-cash return.
Common mistakes
- Using gross yield only.
- Ignoring service charges and vacancy.
- Assuming brochure rents for off-plan.
- Not stress-testing for rate changes.
Related: how to buy property in Dubai, Dubai market and prices, is it safe to invest, the Dubai mortgage calculator and our Dubai city guide. Figures change, so confirm current rules with official sources. This is general information, not financial or legal advice.
Frequently asked questions
What is a good rental yield in Dubai?
It varies by area, property type and costs. Compare net yield across communities rather than relying on a single headline figure.
How do I calculate rental yield in Dubai?
Divide annual rent by the purchase price for gross yield. For net yield, subtract annual costs and use the total cost of buying.
What costs reduce investor returns in Dubai?
Mainly the DLD fee, agency fee, service charges, maintenance, vacancy, management and financing costs.
Is Dubai rental income taxed?
Dubai has no personal income tax on rent, but you may owe tax in your home country. Consult an adviser.
What is ROI on Dubai property?
ROI combines rental income and price change relative to your total investment; calculate net of all costs.
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