How to work out the rental yield on a Dubai property
Gross rental yield is the annual rent divided by the price; net yield takes off service charges, fees, vacancy and other costs and divides by the full cost of buying, so it is lower. Prop971 Research, published by the UAE property platform Prop971, put gross apartment yields across Dubai at 7.3% for studios down to 3.4% for three-bedroom apartments, from DLD data for the twelve months to the end of September. These are past medians, not forecasts or promised returns.
Steps
Get the real rent
Who: You, with your agent
Documents:
- Ejari contracts for similar units in the building
Use registered rents for comparable units rather than asking rents. New leases often register above renewals: BrickDXB's Dubai-wide one-bedroom medians were AED 65,000 on new leases against AED 54,000 on renewals over its latest twelve months.
Work out the gross yield
Who: You
Documents:
- Price or valuation
Divide the annual rent by the price and multiply by a hundred.
List the annual costs
Who: You
Documents:
- DLD Service Charge Index result
- Management and letting fee quotes
- Insurance quote
Include the building's approved service charge, maintenance, letting and management fees, insurance and an allowance for empty months.
Add the purchase costs to the cost base
Who: You
Documents:
- Our buying-costs breakdown
Add the transfer fee, trustee fee, commission and other purchase costs to the price before dividing.
Work out the net yield
Who: You
Take the annual costs off the rent and divide by the total cost base. If you borrow, interest reduces your income further.
Check what limits future rent
Who: You
Documents:
- RERA rental index result
Renewal increases are capped by Decree No. 43 of 2013 against the RERA index, so a below-market rent cannot always be raised quickly.
Worked example (illustrative only)
Assumptions: annual rent AED 90,000, price AED 1,500,000, annual costs AED 25,000 and purchase costs AED 96,220 from our cash-purchase example. Replace every figure with the real ones for the unit.
| Item | Amount |
|---|---|
| Gross yield: rent divided by price | 6% |
| Total cost base: price plus purchase costs | AED 1,596,220 |
| Net yield: rent less annual costs, divided by the cost base | 4.1% |
Calculated by Eagle Star; not a forecast. Data as of .
Dubai apartments by bedroom count: median rent, median ready price and gross yield
| Bedrooms | Median annual rent | Median ready sale price | Indicative gross yield | Leases in the sample |
|---|---|---|---|---|
| Studio | AED 41,000 | AED 560,000 | 7.3% | 118,878 leases |
| One bedroom | AED 59,999 | AED 1,047,382 | 5.7% | 233,851 leases |
| Two bedrooms | AED 78,000 | AED 1,950,000 | 4% | 183,421 leases |
| Three bedrooms | AED 120,000 | AED 3,500,000 | 3.4% | 37,169 leases |
Source: Prop971 Research, third-quarter edition, analysis of DLD Ejari leases and registered ready sales over the twelve months to the end of September. Medians; the source does not publish the number of sales behind each bedroom median.. Data as of .
Apartments by area, all bedroom counts
| Area (as named by the source) | Median annual rent | Median ready sale price | Indicative gross yield | Leases | Sales |
|---|---|---|---|---|---|
| Dubai Investment Park Second | AED 62,000 | AED 579,873 | 10.7% | 4,716 leases | 213 sales |
| International City Phases 2 and 3 | AED 46,000 | AED 500,000 | 9.2% | 10,234 leases | 413 sales |
| International City Phase 1 | AED 38,000 | AED 420,000 | 9% | 26,421 leases | 1,270 sales |
| Dubai South | AED 65,000 | AED 750,000 | 8.7% | 7,040 leases | 859 sales |
| Dubai Land Residence Complex | AED 52,000 | AED 640,000 | 8.1% | 7,942 leases | 619 sales |
| Dubai Production City | AED 50,000 | AED 620,000 | 8.1% | 7,519 leases | 882 sales |
| Dubai Sports City | AED 50,400 | AED 663,468 | 7.6% | 8,837 leases | 1,157 sales |
| Dubai Silicon Oasis | AED 55,000 | AED 730,000 | 7.5% | 16,270 leases | 1,046 sales |
| Arjan | AED 62,000 | AED 840,000 | 7.4% | 14,117 leases | 1,283 sales |
| Jumeirah Village Circle | AED 65,000 | AED 950,000 | 6.8% | 29,807 leases | 4,203 sales |
| Liwan | AED 54,000 | AED 827,854 | 6.5% | 4,810 leases | 464 sales |
| Jumeirah Lakes Towers | AED 85,000 | AED 1,337,500 | 6.4% | 8,571 leases | 908 sales |
| Business Bay | AED 95,000 | AED 1,530,000 | 6.2% | 18,701 leases | 2,285 sales |
| Al Merkadh | AED 75,000 | AED 1,275,000 | 5.9% | 11,906 leases | 1,953 sales |
| Dubai Hills Estate | AED 110,000 | AED 1,850,000 | 5.9% | 5,495 leases | 983 sales |
| Al Jaddaf | AED 75,000 | AED 1,301,116 | 5.8% | 8,998 leases | 546 sales |
| Downtown Dubai | AED 144,570 | AED 2,725,000 | 5.3% | 9,779 leases | 1,600 sales |
| Dubai Creek Harbour | AED 130,000 | AED 2,460,000 | 5.3% | 6,068 leases | 1,232 sales |
| Al Furjan | AED 60,489 | AED 1,196,215 | 5.1% | 26,753 leases | 783 sales |
| Dubai Marina | AED 120,000 | AED 2,430,000 | 4.9% | 19,388 leases | 2,444 sales |
Source: Prop971 Research, same edition and window. These are the twenty areas in the source's table, in its order (highest yield first); the source does not present them as every area. Mixed bedroom counts make area medians rough guides.. Data as of .
Documents checklist
- Registered rents for comparable units
- Price or valuation
- DLD Service Charge Index result
- Quotes for management, letting and insurance
- Purchase cost breakdown
Common mistakes
- Comparing a gross yield with someone else's net yield.
- Using asking rents instead of registered rents.
- Leaving vacancy and service charges out.
- Treating an area median as the yield on a particular unit.
- Assuming past yields will continue.
Frequently asked questions
What is a good rental yield in Dubai?
There is no single good figure: it depends on your costs, financing and risk. As a reference, Prop971 Research's analysis of DLD data put indicative gross apartment yields at 7.3% for studios and 3.4% for three-bedroom apartments in its third-quarter edition, before any costs.
How do I calculate net rental yield in Dubai?
Take the annual service charge, maintenance, fees, insurance and vacancy off the annual rent, then divide by the price plus purchase costs. In our illustrative example, a gross yield of 6% becomes a net yield of 4.1%.
Which areas in Dubai have the highest rental yields?
In Prop971 Research's third-quarter table of twenty areas, the highest indicative gross apartment yields were in areas such as Dubai Investment Park Second and International City, while established areas such as Dubai Marina and Downtown Dubai showed lower gross yields. Higher gross yields can come with higher vacancy or turnover costs.
Are Dubai rental yields guaranteed?
No. Published yields are past medians from third-party analyses of DLD data, not guarantees, and we do not promise or forecast returns.