Dubai Rental Yield: How to Calculate Gross and Net

"What's the yield on this one?" Investors ask me that more than anything else. It depends on what you're measuring. Gross and net can be far apart, and the number in a brochure is almost always gross, worked out on a generous rent. Below is the method I use myself, plus the official DLD data you can use to check any figure someone shows you.

One thing up front. I don't promise returns, and I don't quote "average market yields". Whatever you calculate with this method is an estimate, gross or net, based on DLD data as of the date you pulled it.

Gross yield: a quick filter

The formula:

Gross yield = annual rent ÷ purchase price × 100%

This is a rough screen. You can compare two units with it in a minute. It leaves out the owner's running costs, the purchase fees and any months without a tenant.

People usually go wrong with gross in two places:

• Rent taken from listings. A listing tells you what the landlord hopes to get. A tenant may never sign at that number. Use registered contracts instead (more on those below).
• Developer price lists. For a ready unit the launch price tells you little. Look at actual sales in the same building.

Net yield: what you keep

The formula:

Net yield = (annual rent − owner's annual costs) ÷ total cash invested × 100%

Here both the top and the bottom of the fraction change.

Costs to deduct from rent

You can't opt out of service charges. Under Law No. 6 of 2019 ↗, an owner pays their share of the annual charges approved by RERA and may not refrain from paying them. So always deduct them. Newer buildings with pools, spas and a concierge tend to charge more, and every dirham of that comes off your net.

What counts as "total cash invested"

The denominator covers every dirham you put in, and the price is only part of it:

• the purchase price;
• the DLD fee: on a resale purchase, DLD lists ↗ 2% of the value for the buyer and 2% for the seller, plus fixed and service partner fees;
• broker commission (for resale with me it's AED 21,000 including VAT up to AED 1,000,000, and 2% + VAT above that; off-plan bought from the developer is free for the buyer);
• mortgage costs if you borrow: mortgage registration, valuation, bank fees;
• furniture and appliances if you let it furnished;
• for off-plan, registration fees and handover payments.

I've put the full list in my purchase costs guide.

A worked illustration

The numbers here are made up, not market data. They're only there to show the mechanics.

It's the same unit. Gross uses 80,000, net uses 57,300. On top of that, the net denominator is bigger than the price by the amount of fees and commissions. So the gap between the brochure figure and your own numbers grows from both sides of the fraction.

Buying with a mortgage

With finance, I find two other measures more useful than net yield:

1. Monthly cash flow. Rent, minus costs, minus the bank instalment. Are you up or down each month?
2. Return on your own cash. Whatever is left after all payments, divided by your down payment and upfront costs.

If the rent covers the instalment, leverage lifts the return on your own cash. If it doesn't, leverage makes things worse. You can work out the instalment and upfront costs in the mortgage calculator.

From my practice. I found clients a unit in The V Tower by Tiger at AED 666,000. The plan was 50% during construction and 50% over 4 years after handover. We had a tenant before the furnishing was even finished, and the rent covers the post-handover instalments. I wasn't chasing a percentage there. I was checking whether the rent would be enough to keep paying the developer after the keys.

Off-plan: estimating before completion

An off-plan unit has no rent yet, so any estimate is softer. Here's how I go about it:

1. Use rents from ready buildings nearby. I take the Rents dataset in DLD open data and filter for the same area, a similar class of building, the same bedroom count and new contracts only.
2. Allow for time. The market moves while the building goes up. A calculation made today won't hold as a forecast for handover day.
3. Model cash flow after handover. If the plan has a post-handover portion, what matters is whether the expected rent covers those instalments plus service charges.
4. Budget for set-up costs. Furniture, appliances, utility connections, and the empty weeks while you look for a tenant.

Before completion, any yield figure is very rough. Run it again once the building is handed over and the first tenancy contracts are registered. Instalment structures are covered in payment plans and post-handover.

Where to get the data: official DLD sources

These are the sources I use myself.

Rents: Real Estate Data → Rents

DLD open data ↗ includes a Rents dataset. You can filter by period, area, usage, property type and contract version (New or Renew). Everything in it is a registered tenancy contract. Listings don't appear there.

How I use it:

1. Choose the area and property type.
2. Set the period to recent months.
3. Filter for New contracts, so you see what units let for today and old renewals don't drag the figure.
4. Compare similar units: the same or neighbouring buildings, the same bedroom count.

Prices: Real Estate Data → Transactions

The Transactions dataset lists deals by type (Sales, Mortgages, Gifts), ready or off-plan, area and property type. For the denominator, pull recent ready sales in the same building.

Rental Index

The Rental Index calculator ↗ gives the average rent for an area, property type and number of rooms, along with the permitted increase at renewal. You'll find it on the DLD website, in Dubai REST and in DubaiNow. I use it to check whether an expected rent is realistic and whether there's room to raise it later. There's more in my Rental Index guide.

Rental price index

DLD also publishes a Residential Rental Performance Index ↗ that tracks rent trends. DLD itself says the index shouldn't be used for pricing or investment decisions. I read it as background on the market and nothing more.

Checklist before buying to let

• Rent comes from registered contracts (Rents), never from listings.
• Price comes from actual sales (Transactions) in the same building.
• Service charges come from the Service Charge Index for that project.
• Vacancy and maintenance are budgeted.
• Every upfront cost is counted on top of the price.
• With a mortgage, you've checked that rent covers the instalment.
• The date of your data is written down. Six months later the picture may differ.

Rents and prices move. A yield figure is an estimate as of a date and should never be read as a promise. Past deals don't guarantee future results.

The short version

• Use gross to filter quickly and net to see the real picture.
• For net, deduct service charges, vacancy, maintenance, fees and interest.
• Put all cash invested in the denominator, DLD fee and commissions included.
• Get your data from DLD open data: Rents and Transactions.
• Write down the date of every calculation.

If you'd like to run the numbers on a specific unit, start with the payment and upfront costs calculator and then message me on WhatsApp. I'll pull the DLD data for the building, and we'll go through gross and net together using real contracts.