How to Calculate Rental Yield in the UAE
Rental yield is the most important number for any buy-to-let investor. It tells you how much annual income your property generates relative to its value. In the UAE, yields vary significantly by emirate, area, property type, and size. Understanding your number puts you in a much stronger position at renewal negotiations.
Gross rental yield
Gross yield is the simplest calculation:
Gross yield (%) = (Annual rent ÷ Property value) × 100
Example
Property value: AED 1,200,000
Annual rent: AED 96,000 (AED 8,000/month)
Gross yield = (96,000 ÷ 1,200,000) × 100 = 8.0%
Net rental yield
Gross yield ignores your costs. Net yield is what actually ends up in your pocket:
Net yield (%) = ((Annual rent − Annual expenses) ÷ Property value) × 100
What to include in annual expenses
- Service charges (SC): paid to the building or community management. Typically AED 10–25/sqft per year depending on the development.
- Maintenance and repairs: budget at least 1% of property value annually for a typical apartment.
- Management fee: if using a property manager, typically 5–8% of annual rent.
- Ejari registration: AED 220 per year in Dubai.
- Insurance: building and contents insurance: varies, typically AED 500–2,000/year for an apartment.
- Vacancy periods: realistically budget for 1–2 months vacant per year unless your tenant is on a long-term lease.
Net yield example
Using the same property (value AED 1,200,000, rent AED 96,000/year):
| Expense | Amount (AED) |
|---|---|
| Service charges (12 AED/sqft × 1,000 sqft) | 12,000 |
| Maintenance / repairs | 4,500 |
| Ejari registration | 220 |
| Insurance | 800 |
| 1 month vacancy allowance | 8,000 |
| Total expenses | 25,520 |
Net annual income: AED 96,000 − AED 25,520 = AED 70,480
Net yield = (70,480 ÷ 1,200,000) × 100 = 5.87%
Return on investment (ROI) vs yield
Yield is calculated on the current market value of the property. ROI is calculated on what you actually paid, including all acquisition costs:
ROI (%) = (Net annual income ÷ Total invested) × 100
Total invested includes: purchase price + DLD registration fee (4% + AED 540) + agency fee (2% typical) + NOC fee + any renovation costs. For cash buyers, this is the most meaningful return metric. For leveraged buyers, you'd also need to factor in mortgage interest.
Benchmarking your rent
Knowing your yield is only half the picture. You also need to know if the rent you're charging is at, above, or below market rate, which affects both your yield and your ability to retain or replace tenants.
DOSH's market rate tool checks live listings in your area for comparable units and shows you the minimum, average, and maximum rents, so you always walk into a renewal conversation with the data to back your position.