Rental Yield in Dubai: How to Calculate Gross and Net Returns

How to calculate rental yield in Dubai: the gross and net formulas, which costs to deduct, and how to check service charges before you buy.

Rental yield in Dubai is often the first number an investor asks about, and very often it is the number least likely to match what ends up in their bank account. Listings and brochures usually quote a gross figure: annual rent divided by price. That is useful for a quick comparison, but it leaves out service charges, vacancy, management and the fees you paid to buy. This guide explains how to calculate both gross and net rental yield in Dubai, which costs belong in the sum, and where to check the figures yourself before you commit.

How to calculate gross rental yield in Dubai

Gross yield is the simple version. Take the annual rent, divide it by the purchase price and multiply by 100. A property bought for AED 1,000,000 that rents for AED 70,000 a year has a gross yield of 7%. Because it ignores every cost, gross yield is best used as a first filter: it tells you which properties are worth a closer look, not which ones will actually perform.

For context, Engel & Völkers, citing Property Monitor data for August 2026, puts the average gross yield across Dubai residential property at about 6.3%, with apartments at around 6.7%, townhouses around 5.1% and villas around 4.5%. Individual communities sit well above and below those averages, and a single building can differ noticeably from its neighbours.

How to calculate net rental yield

Net yield subtracts the costs of owning and letting the property from the rent before you divide. The fairer version also divides by your total acquisition cost rather than the headline price, because the money you spent to buy is part of what you invested. The formula is: (annual rent minus annual costs) divided by total acquisition cost, multiplied by 100.

Here is an illustrative example with round numbers. You buy an apartment for AED 1,000,000 and pay the 4% Dubai Land Department transfer fee plus other purchase costs, bringing your total outlay to roughly AED 1,050,000. It rents for AED 70,000 a year. Service charges are AED 10,000, you allow AED 3,500 for management, AED 2,000 for maintenance and insurance, and one month of vacancy (about AED 5,800). That leaves around AED 48,700, a net yield of about 4.6% on your total outlay, compared with the 7% gross figure on the same property.

Gross yield tells you which properties to look at. Net yield tells you which ones to buy.

The costs that turn gross into net

• Service charges: the annual fee for the building or community, usually charged per square foot. Usually the biggest single cost for apartments, and the one that varies most between buildings.
• Vacancy: the weeks or months between tenants, plus any rent-free period you offer to secure one.
• Management and leasing: agency fees for finding a tenant and, if you use one, a property manager's annual fee.
• Maintenance and insurance: routine repairs, replacing appliances and a landlord insurance policy.
• Furnishing: if you let furnished or as a holiday home, budget for the initial fit-out and periodic replacement.
• Mortgage interest: if you borrow, interest reduces your cash return even though it does not change the property's yield.

Two items often get confused. The Dubai Municipality housing fee, set at 5% of the annual rent, is collected through the occupant's DEWA bill, so when the property is let it is normally paid by the tenant rather than the landlord. And in Dubai individuals do not pay personal income tax on rental income, which is one reason net yields here compare well with many other markets.

Check service charges before you trust a yield

Because service charges move net yield so much, do not rely on the figure in a listing. The Dubai Land Department publishes a Service Charge Index, available on its website and through the Dubai REST app, where you can look up the approved budget for a project by name, use and year. The index is indicative, so the amount an owner pays may be slightly different, but it is a reliable way to sense-check what a seller or agent tells you. Our guide to service charges in Dubai explains how they are set.

What a good rental yield in Dubai looks like

There is no single right answer, because yield always trades off against something else. Smaller apartments in value communities tend to show higher gross yields, while villas and prime waterfront homes usually yield less on paper but may hold demand from long-staying tenants and appeal to a different buyer when you sell. A higher yield in a building with heavy service charges, frequent tenant turnover or a lot of new supply nearby can end up worse than a lower headline figure in a well-run building.

• Compare like with like: use net yield on total outlay for every property on your shortlist.
• Use realistic rent: check recent rents for similar units rather than the highest asking price on a portal.
• Think about supply: large numbers of handovers nearby can put pressure on rents for a period.
• Know the rules: rent increases on renewal are linked to the official rental index, so plan on the rules, not on hope.
• Consider the exit: yield is only half the return; how easily the property will sell later matters too.

Off-plan, ready and short-term lets

An off-plan unit earns no rent until handover, so its yield is really a forecast based on expected rents at completion and your total payments by then. A ready property can be let straight away, which makes the calculation more certain. Short-term letting can raise gross income, but it adds a holiday home permit, furnishing, cleaning, platform and management costs, and more variable occupancy, so run a separate net calculation rather than assuming it is simply better.