The two formulas
Gross yield is annual rent divided by purchase price. Net yield is annual rent minus all operating costs, divided by the cash you actually invested.
The gap between them in Dubai is usually 1.5 to 3 percentage points, driven mostly by service charges.
- Gross yield = annual rent / purchase price
- Net operating income = annual rent - service charges - vacancy allowance - management - maintenance - insurance
- Net yield = net operating income / (deposit + all purchase costs)
The costs people forget
Four line items account for most of the surprise.
- Vacancy — even a strong unit averages a few weeks of void between tenancies. Allow 4-8% of annual rent unless you have a reason not to.
- Management — 5-8% of rent if you are not managing it yourself, higher for short-term lets.
- Maintenance — an annual allowance for AC servicing, appliances and touch-ups, even in a new building.
- Purchase costs — the 6-8% of one-off fees is part of your invested capital and belongs in the denominator.
Cash-on-cash is the number that matters with a mortgage
If you finance the purchase, net yield on price stops being useful. What you want is cash-on-cash return: cash left after mortgage payments, divided by cash invested. Leverage can lift this well above the unleveraged yield when the mortgage rate sits below your net yield — and can turn it negative when it does not.
Run both. A property can look excellent on gross yield, acceptable on net yield, and lose money monthly once the loan payment is in.
See what this means for a specific unit
Enter a price, size and rent — the calculator applies service charges, vacancy, fees and your mortgage to show net yield and monthly cash flow.
Open the yield calculator →Common questions
- What is a good net rental yield in Dubai?
- Net yields in Dubai commonly land between 4% and 6.5% after service charges, vacancy and management, depending on community and building. Anything advertised well above that is usually a gross figure or a short-let projection.
- Why is my net yield so much lower than the listing's yield?
- Listings almost always quote gross yield on the purchase price. Once service charges, a vacancy allowance, management and the 6-8% of purchase costs are included, the same property typically loses 1.5-3 percentage points.
Keep reading
General information only, not legal, tax or financial advice. Fees, lending rules and residency criteria in Dubai change — confirm current figures with the Dubai Land Department, your bank or a licensed adviser before you commit.