Rental Yield in Dubai

Q: How do I calculate rental yield?

Gross yield = annual rent / purchase price x 100. Net yield subtracts service charges, maintenance, management and vacancy from the rent, and adds roughly 7% purchase costs to the price. Example: AED 1.2M apartment renting at AED 85,000 = 7.1% gross, about 5% net.

Q: Does a mortgage improve rental returns?

When net yield exceeds the mortgage rate, leverage raises the return on your own cash - UAE investment mortgages typically finance 60-65% LTV with fixed rates from 3.75% (July 2026). Model the post-fixed-period reversion rate before relying on the spread.

How to calculate gross and net yield, what Dubai actually returns, and how financing changes the math — with worked examples.

Worked example — AED 1.2M apartment renting at AED 85,000/yr

Gross yield rent ÷ price7.1%

Typical running costs service charges, maintenance, management, vacancy~AED 20–25K/yr

Net yield (rent − costs) ÷ price≈ 5.0–5.4%

Dubai's citywide gross yields are commonly reported around 6–7% for apartments — among the highest of any major global city. Affordable communities are often quoted at 8%+, prime villas lower. Always underwrite on net yield, not the advertised gross.

How to calculate rental yield

Gross yield = annual rent ÷ purchase price. Net yield = (annual rent − running costs) ÷ total acquisition cost. The gap between the two is where Dubai investors get surprised: service charges (often AED 10–25+ per sq ft per year depending on the building), property management (~5% of rent if outsourced), maintenance, and a sensible vacancy allowance. Include your ~7% purchase costs (DLD 4% + fees) in the denominator for an honest number.

What yields does Dubai deliver?

Commonly reported gross yields: apartments ~6–7% citywide, with affordable high-demand communities (JVC, International City, Discovery Gardens and similar) frequently quoted at 8%+, mid-market areas around 6–7%, and prime/villa districts (Palm, Emirates Hills) closer to 4–5% — the classic yield-vs-appreciation trade-off. For comparison, prime London or Singapore gross yields are typically quoted nearer 3–4%, which is why Dubai screens so well for income investors. Figures move with the rental market; treat area numbers as a starting screen, not gospel.

Yield with a mortgage — leveraged returns

Financing changes the question from "what does the property yield?" to "what does my cash yield?". Investment purchases are typically capped around 60–65% LTV, so on the AED 1.2M example you'd put in roughly AED 480–565K including costs. With fixed rates from 3.75% and rent covering the EMI, the cash-on-cash return on your actual outlay often beats the unleveraged net yield — while you also hold the appreciation upside on the full asset. The flip side: rate reversion after the fixed period can flip the math, which is why the EIBOR reversion margin matters as much as the headline rate.

Banks generally lend on investment property to residents and non-residents alike; see the investment property mortgage guide for eligibility detail.

Model the EMI at any rate → · Current Dubai home loan rates →

Rental yield FAQs

What is a good rental yield in Dubai?

Citywide gross yields are commonly reported around 6–7% for apartments. Anything at 8%+ gross is strong (typical of affordable communities); prime areas run 4–5% but tend to appreciate differently. On a net basis, 5%+ is a healthy Dubai result.

How do I calculate rental yield?

Gross: annual rent divided by purchase price × 100. Net: subtract service charges, maintenance, management and a vacancy allowance from the rent, and add purchase costs (~7%) to the price. An AED 1.2M unit renting at AED 85K is 7.1% gross, roughly 5% net.

Is rental income taxed in Dubai?

There is currently no personal income tax on rental income in the UAE, which flatters net yields versus most global cities. Your home country may tax it if you are tax-resident elsewhere — take advice for your situation.

Does a mortgage improve rental returns?

Leverage amplifies the return on your own cash when the net yield exceeds the mortgage rate — with fixed rates from 3.75% and typical Dubai net yields around 5%, that spread is currently positive. It also amplifies risk: model the post-fixed-period reversion rate before committing.

Buying to let? We'll model the full picture — EMI, net yield, cash-on-cash — against live investment mortgage offers. Free.

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