• Emirate Dubai
  • Topic Investing
  • Reviewed Substance reviewed 2026-10-12 · draft, human review pending

Short answer

Gross yield divides rent by price. Net yield subtracts service charges, management, voids and transaction costs. This briefing shows the arithmetic — with labelled assumptions, not a forecast.

This is an orientation answer, not advice for an individual case.

Gross yield on a let home is a division: annual rent divided by capital deployed. Net yield is the same division after the costs you actually pay to hold the unit. Dubai marketing often shows only the gross figure, sometimes even on an asking price with no DLD fees. That is not a lie if the assumptions sit beside it. It is misleading if they do not.

This briefing sets out the formulae and works one worked example. It is not an expectation of your yield, not buy advice and not a claim that Dubai “offers high returns”.

Contents

Definitions

Gross rental yield ≈ (contracted or assumed annual rent) / (capital deployed).

Net rental yield ≈ (annual rent minus holding costs minus voids minus management) / (capital deployed).

Total return would be value change plus net income minus exit costs. This briefing omits that third sum: future value is not a fact. Anyone who needs total return in a pitch to justify the deal is asking you to believe a forecast.

Every percentage here is arithmetic, not historic. There are no invented market averages.

Which denominator you choose

Three denominators, three stories:

  1. Asking price only. Makes gross yield look highest. Understates what you pay.
  2. Asking price + buyer transaction costs. Fairer. Use DLD as a starting point: 2% buyer, plus any seller share you take on by contract, plus trustee AED 4,000 + VAT from AED 500,000, plus commission and legal — see apartment costs. That is not an all-in fee.
  3. Replacement cost over two years. Only useful if you add capex (fit-out, snagging). Not as disguised capital growth.

Pick one denominator and keep it when you compare two units. Do not switch denominators to flatter the favourite.

Capital in euros or pounds is a different denominator from AED. The dirham is pegged to the US dollar; your home currency moves. State yield in AED and in home currency, or admit that you are leaving FX outside the yield.

Which numerator you choose

  • Contract rent if an Ejari contract is running (Dubai tenancy registration). Ask for the contract, not a verbal “asking rent”.
  • Asking rent is a landlord’s wish, not income.
  • Seasonal / short stay is a different business model: higher gross potential, higher voids, different community rules, different compliance. Do not mix it with long-stay yield.

Do not put “uplift” in the rental-yield numerator. That is a different sum.

Costs that turn gross into net

Subtract at least these lines from the numerator. Source the amounts from a statement or a quote, not a blog.

  • Service charges and any master-community levy (service-charge briefing).
  • Chiller / district cooling if separate.
  • DEWA (Dubai) for consumption you bear during a void.
  • Management or letting commission.
  • Owner’s insurance.
  • Maintenance and replacement (AC, water heaters, furniture if furnished).
  • Voids: weeks without rent.
  • Annual Ejari/renewal costs where they apply.
  • Mortgage interest if you want what remains after finance — that is cash-on-cash, not unlevered net yield. No LTV promise: non-resident mortgage.

Purchase transaction costs belong in the denominator, not as an annual deduction, unless you amortise them over a holding period in a separate analysis. Be consistent.

Tax treatment in the Netherlands, Belgium or the UK does not belong as a fixed percentage in this sum. That is an expert question per country of residence: tax briefing.

Worked example

Assumptions, kept round:

  • Purchase price AED 2,000,000, completed apartment in Dubai.
  • Buyer pays 2% DLD (AED 40,000); seller pays the other 2%. Trustee AED 4,200 including a 5% VAT working hypothesis. Commission + legal + NOC + FX = AED 65,000. Denominator = 2,000,000 + 40,000 + 4,200 + 65,000 = AED 2,109,200.
  • Contracted long-stay annual rent AED 120,000 (assumption; not a market estimate).
  • Service charge AED 16,000, chiller AED 4,500, management 5% of rent collected, insurance AED 1,200, maintenance AED 3,000, void 4 weeks (1/13 of annual rent).

Gross on asking price: 120,000 / 2,000,000 = 6.0%.

Gross on denominator including transaction costs: 120,000 / 2,109,200 ≈ 5.7%.

Void: 4/52 × 120,000 ≈ AED 9,231 missed rent. Rent collected ≈ AED 110,769.

Management 5% × 110,769 ≈ AED 5,538.

Holding costs: 16,000 + 4,500 + 5,538 + 1,200 + 3,000 = AED 30,238.

Net income: 110,769 − 30,238 = AED 80,531.

Net on the wider denominator: 80,531 / 2,109,200 ≈ 3.8%.

Same unit, 12-week void: more missed rent, lower management, service charges still run. Net yield falls harder than gross. That is the point of the exercise: sensitivity, not a forecast.

What the sum does not say

  • Whether you find a tenant.
  • Whether service charges rise next year.
  • Whether the community rules allow letting.
  • Whether your home tax authority taxes the income or the asset.
  • Whether you can sell the unit liquidly.

See risks and the investment plan. Help building a model: Investing, Property.

Frequently asked questions

Who is “Gross and net yield on Dubai property explained” for?

Dutch and Belgian readers considering dubai. The file organises process, cost logic and sources — it does not decide an individual case.

Does this apply in every emirate?

No. This briefing covers dubai. Other emirates have their own registrars, tariffs and portals.

Is this personal advice?

No. We do not guarantee a licence, visa, bank account, return or tax residence. Unknown items stay open.

Sources

Reviewed 17 September 2026. Percentages in the worked example follow from the assumptions, not from the market. Knowledge library.