Guide
Calculator
Dubai rental yield calculator
The yield a developer advertises is a gross yield. This calculator works out what is left once service charges, vacancy, management and purchase costs are paid — and shows the gap between the two.
The short answer
The gap between the advertised gross yield and the real net yield comes down almost entirely to one line: service charges, billed to the owner per square foot per year, at a rate specific to each building. Two flats at the same price, let at the same rent, in two neighbouring towers, do not return the same.
Operating assumptions editable
These are starting values, not market averages, and they are marked ‘to verify’ in our internal register. Replace them with the figures for your property as soon as you have them.
Charged on the rent actually collected, not the headline rent. Enter 0 if you manage the property yourself. Starting value: 5%.
8% is roughly one empty month a year between two tenants.
Building insurance is usually already included in the service charges: do not count it twice. Starting value: AED 1,000.
Purchase costs editable
These costs are added to the price and make up the capital you actually invest. Net yield is calculated on that capital, not on the listed price.
The Dubai Land Department fee for registering the transfer of ownership. Starting value: 4%.
Whether VAT applies depends on the agent: check your agency agreement. Starting value: 2%.
The approved registration trustee’s fee, plus issuance of the title deed. Starting value: AED 4,580.
Applies to resales only. On a purchase direct from the developer, enter 0. Starting value: AED 1,500.
Example: illustrative figures
These values illustrate the method: they describe no real property and are not a market yield. Enter your own figures.
Gross yield
7.00%
Headline rent divided by the purchase price. The figure in the brochure.
Net yield
4.78%
After running costs and vacancy, measured against the capital you actually invest.
2.22 points between the advertised yield and what is left in your account
- Annual net income
- AED 61,166
- Monthly cash flow
- AED 5,097
- Payback period
- 20.9 years
- Capital invested
- AED 1,279,280
- of which purchase costs
- AED 79,280
- Service charges
- AED 11,250
Why the gap
In this scenario, 20.9% of the rent collected goes on running costs, and service charges alone make up 70% of those costs.
In this configuration the property produces no net income: running costs exceed the rent collected, and there is no payback period.
Ask for your tower’s actual service charges
The calculation runs in your browser: your figures stay on your device.
Gross yield 7.00%, net yield 4.78%, a gap of 2.22 points. Annual net income AED 61,166, monthly cash flow AED 5,097, capital invested AED 1,279,280, payback period 20.9 years.
Transparency
Method and assumptions
Seven lines of calculation, no black box. Every assumption applied is shown in the calculator, and you can change it.
The calculation, line by line
- Gross yield = headline annual rent ÷ purchase price.
- Rent collected = annual rent × (1 − vacancy rate).
- Running costs = service charges + management fee + insurance.
- Net income = rent collected − running costs.
- Capital invested = purchase price + DLD fee + agency commission + trustee + NOC.
- Net yield = net income ÷ capital invested.
- Payback period = capital invested ÷ net income.
Two method choices deserve to be stated rather than buried. First: the management fee is charged on the rent collected, not the contractual rent — an empty month is not billed. Second: net yield is measured against the capital invested, purchase costs included, not against the purchase price alone. This convention lowers the net figure by a few tenths of a point compared with common practice. We stand by it: it is the sum that actually left your account. If you prefer the other reading, set the purchase costs to zero in the calculator and the result adjusts.
What each yield takes into account
| Item | Gross yield | Net yield |
|---|---|---|
| Headline annual rent | Counted | Counted |
| Vacancy | Ignored | Deducted |
| Service charges | Ignored | Deducted |
| Management fee | Ignored | Deducted |
| Landlord insurance | Ignored | Deducted |
| DLD, agency, trustee and NOC fees | Ignored | Added to capital invested |
| Tax, wherever it is due | Ignored | Ignored |
| Mortgage and interest | Ignored | Ignored |
| Capital gain on resale | Ignored | Ignored |
Scroll the table sideways to see every column.
The starting values, and their status
The calculator opens on a worked scenario so that it can be read straight away. The assumptions in this scenario are working values, not market averages: all of them are marked ‘to verify’ in our internal register, and all of them can be changed on screen. Replace them with the figures for your property as soon as you have them — that is when the result becomes yours.
| Assumption | Starting value | Detail | Status |
|---|---|---|---|
| DLD transfer fee | 4% | Dubai Land Department, as a percentage of the price | To verify |
| Agency commission | 2% | VAT treatment to confirm in your agency agreement | To verify |
| Trustee office and title deed | AED 4,580 | Flat fee: approved registration trustee plus title deed | To verify |
| Developer NOC | AED 1,500 | Resales only; varies widely from one developer to another | To verify |
| Service charges | AED 15 per sq ft per year | Midpoint of a working range of 10 to 25 | To verify |
| Management fee | 5% | Charged on rent collected, not on headline rent | To verify |
| Vacancy rate | 8% | Roughly one empty month a year | To verify |
| Landlord insurance | AED 1,000 | Excludes the building’s own policy | To verify |
Scroll the table sideways to see every column.
None of these figures is an official schedule. Regulatory fees change, commissions are negotiated, and service charges are read from the statement of a specific building. When we work on a file, we start from the statement, not from an average.
The line that decides
Why the gap almost always comes from service charges
Service charges are billed to the owner per square foot per year, at a rate specific to each building and subject to RERA oversight. They pay for upkeep of the common areas, security, lifts, shared facilities and the reserve fund. A tower with pools, gyms, a concierge and large lobbies costs several times the rate of a plain building in the same area — and the rent does not rise in the same proportion.
That is why a gross yield quoted without the building’s service charge rate is no basis for a decision. Gross yields can be compared from one property to another; net yields can only be compared once you have the service charge statement. Between two flats at the same price and the same rent, a difference in service charge rate is enough to move the net figure by more than a point.
Three traps come up again and again. The area used to calculate service charges is the one on the title deed, which can differ from the marketed area. The rate for a new building is often revised upwards after the first years of operation, once the real budget is known. And central air conditioning is billed separately in some buildings: we check what the service charges include, and what they do not, before relying on a rate.
The practical conclusion fits in one sentence: we obtain the tower’s service charge statement before signing, never after. It is the first document we ask for on a file, and the one that most often changes a buyer’s mind.
Limits
What this calculator does not tell you
The yield shown is a deliberate simplification. These are the blind spots that change its result.
It says nothing about your tax
No tax is applied, here or anywhere else. Rent received in Dubai may still be taxable in the country where you are tax resident, depending on your situation and any applicable tax treaty. The yield shown is a pre-tax yield, and the difference can be considerable.
It ignores financing
The calculation assumes a cash purchase. A mortgage changes everything: interest cuts into net income, but leverage reduces the capital you put in, and the return on your own funds bears no relation to this figure.
It does not bet on resale
No capital gain, no assumption that prices rise or fall. The payback period shown is repayment from rent alone. That is deliberately conservative: a capital gain projection is an opinion, not a calculation.
It does not index rent or charges
Rent and service charges stay fixed over the whole period. In practice service charges change, and rent increases in Dubai follow a regulatory framework that limits them: the two drift, rarely in the same direction.
It does not model short-term rentals
Holiday letting follows a different model: an operating permit, occupancy rates, cleaning, furniture, booking platforms, day-to-day operations. Revenue is higher; the net margin is not comparable. Do not stretch this calculator to cover it.
It does not know your tower
The line that decides the result is your building’s service charge rate, and that rate is specific to the building. Until you have the statement for the tower you are considering, the net figure shown remains an approximation, however careful.
Its default values are not validated
The starting assumptions are working values, recorded as such in our internal register, not market averages. They are there to be replaced with the figures for your property, not to be quoted.
The takeaway
This calculator is for quickly ruling out what does not hold up, and for asking the right questions about what does. It does not replace reading the service charge statement of a specific building, nor a tax adviser’s view of your personal situation.
Frequently asked questions
What people ask us
What is the difference between gross and net rental yield in Dubai?
Gross yield divides the annual rent by the purchase price, with nothing deducted: it is the figure shown in brochures. Net yield deducts service charges, vacancy, management fees and insurance, and measures the result against the capital actually invested, purchase costs included. On a typical flat, the gap is counted in points, not tenths of a point.
What are service charges and who pays them?
They are the building’s shared running costs, billed to the owner per square foot per year, at a rate specific to each building and subject to RERA oversight. They cover upkeep of the common areas, security, shared facilities and the reserve fund. A tower with extensive amenities costs several times the rate of a plain building, and it is this line that decides your net yield.
Should net yield be calculated on the purchase price or on the capital invested?
We use the capital invested, meaning the price plus purchase costs, because that is the sum that actually left your account. Calculating on the price alone flatters the result by a few tenths of a point. You can set all purchase costs to zero in the calculator to get the other convention and compare the two.
Are DLD transfer fees included in the yield calculation?
Yes, in our method. They are non-recoverable purchase costs: they increase the capital tied up without increasing the rent. Leaving them out amounts to pretending the purchase cost nothing more than the price of the property.
Does this calculator take tax into account?
No, and deliberately so. How rental income from the UAE is taxed depends on your tax residence, any applicable tax treaty and your personal situation. That question belongs with a tax adviser in your country of residence, file in hand: putting a flat rate in a calculator would be more dangerous than putting none.
Can I use this calculation for a short-term rental?
No. Holiday letting requires an operating permit, an occupancy rate that varies with the season, and operating costs this calculator does not include: cleaning, laundry, furniture, platform commissions, day-to-day management. The advertised revenue is higher; the net margin is not comparable.
Why is the payback period shown so long?
Because it counts net rent only. It assumes no rise in the property’s value, no rent indexation and no resale. It is the time it takes for rent alone to repay the capital invested, and it is the most cautious reading you can make of a rental investment.
Go further
Independent advice
This calculation, with your tower’s actual service charges
Tell us the building or area you have in mind. We take your assumptions, replace the service charge rate with the one recorded for that building, and send you the full calculation, with anything still uncertain clearly flagged.