How to Calculate Rental Yield in Dubai: Formula, Worked
Step-by-step guide to calculating rental yield in Dubai, gross and net formulas, AED 850K worked example, service charges, vacancy, Ejari data sources
By Invest Gulf Editorial · Updated July 27, 2026 · 20 min read
Every Dubai listing shows a yield percentage. Almost none shows how it was calculated, or what is left after service charges, vacancy, and management. This guide gives you the formulas, a full worked example on a realistic AED 850,000 JVC studio, and the data sources that separate marketing math from planning math.
| Step | Action |
|---|---|
| 1 | Get Ejari-based annual rent |
| 2 | Confirm purchase price or total cost |
| 3 | Pull building service charge (Mollak/REST) |
| 4 | Add management, vacancy, maintenance |
| 5 | Calculate gross and net |
| 6 | Stress-test charges +20% |
What is the gross rental yield formula in Dubai?
Invest Gulf’s 2026 answer: What is the gross rental yield formula in Dubai requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Gross yield equals annual rent divided by purchase price, times 100. On AED 800,000 and AED 60,000 rent, gross yield is 7.5%.
- Purchase price: AED 800,000
- Annual rent: AED 60,000
- Gross yield = (60,000 ÷ 800,000) × 100 = 7.5%
Gross yield is useful for comparing two properties on the same basis, same rent data source, same price basis. It is not useful as your final investment decision number.
Brokers and developers quote gross because it is higher and requires no building-specific research.
How do you calculate net rental yield in Dubai?
Invest Gulf’s 2026 answer: How do you calculate net rental yield in Dubai requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Net yield subtracts service charges, management, vacancy, and maintenance from rent, then divides by total acquisition cost including about 4% DLD on resale purchases.
| Cost bucket | How to estimate |
|---|---|
| Service charges | AED/sqft × unit size (from Mollak via Dubai REST) |
| Property management | 5-8% of collected rent (if outsourced) |
| Vacancy | % of gross rent (see assumptions below) |
| Maintenance | Flat annual provision |
| Ejari / admin | AED 220 per tenancy + landlord incidentals |
| STR licensing | Only if short-term, DET permit, Tourism Dirham |
Total acquisition cost (recommended conservative basis):
Total cost = Purchase price + DLD 4% + Trustee fee + Buyer broker commission (if any)On AED 800,000 cash resale purchase, total cost often lands near AED 848,000-860,000, and net yield on that base is lower than on price alone.
For fee detail, see Cost of Buying Property in Dubai. For community-level yield ranges, see Dubai Rental Yield Guide.
Which data inputs matter for a Dubai yield model?
Invest Gulf’s 2026 answer: Which data inputs matter for a Dubai yield model requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Use Ejari transacted rents, building-specific Mollak service charges, honest vacancy, and seller tenancy disclosure on resale stock.
Sources:
- Dubai REST app, building and area transaction history
- RERA Rental Index, published ceilings
- Licensed broker, three same-layout comparables with Ejari refs
- Seller disclosure, current tenancy contract on resale
Service charges: building-specific
Average “AED 15/sqft” citywide assumptions destroy accuracy.
Pull the Mollak schedule for the specific building via Dubai REST or RERA portal. Premium towers run AED 22-35/sqft; JVC mid-rise often AED 14-20/sqft.
Vacancy: be honest
| Scenario | Vacancy assumption | Calendar equivalent |
|---|---|---|
| Prime long-term (Marina, Downtown) | 4-5% | ~2-3 weeks/year |
| Citywide mid-market average | 7-8% | ~4 weeks/year |
| Oversupplied micro-location | 10-12% | 5-6 weeks/year |
| Short-term rental | Seasonal, model annually | Summer softening |
Dubai citywide baseline in market models is often 7-8%, using zero vacancy is how brochures show 9% net.
How should you assess: Worked example: AED 850,000 JVC studio?
Invest Gulf’s 2026 answer: How should you assess: Worked example: AED 850,000 JVC studio requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
The worked example below shows gross near 7.3% becoming net near 4.7% on capital deployed once charges and vacancy apply.
Income and costs (annual)
| Line item | Calculation | AED |
|---|---|---|
| Annual rent (Ejari-based) | Market comparable | 62,000 |
| Service charges | 420 sqft × AED 17/sqft | 7,140 |
| Management fee | 6% × 62,000 | 3,720 |
| Vacancy allowance | 7% × 62,000 | 4,340 |
| Maintenance provision | Flat estimate | 3,500 |
| Ejari / minor landlord costs | Amortised | 500 |
| Total operating costs | 19,200 | |
| Net rental income | 62,000 − 19,200 | 42,800 |
Yield results
| Metric | Formula | Result |
|---|---|---|
| Gross yield (on price) | 62,000 ÷ 850,000 | 7.29% |
| Gross yield (on total cost) | 62,000 ÷ 905,000 | 6.85% |
| Net yield (on price) | 42,800 ÷ 850,000 | 5.04% |
| Net yield (on total cost) | 42,800 ÷ 905,000 | 4.73% |
Interpretation: Marketing rounds the gross figure to “7.3%” or “7.5%.” Your planning number on capital actually deployed is closer to 4.7% net, still competitive tax-free versus many European markets, but not the headline.
Stress test: If service charges come in at AED 20/sqft instead of 17:
- New service charges: AED 8,400 (+AED 1,260)
- Net income: AED 41,540
- Net yield on total cost: 4.59%
That 0.14-point move is why building-specific charge data matters.
How should you assess: Worked example: short-term vs long-term rent?
Invest Gulf’s 2026 answer: How should you assess: Worked example: short-term vs long-term rent requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Short-term gross uplift does not always beat long-term net after DET permits, Tourism Dirham, and higher management percentages.
In this illustrative case, STR gross uplift does not automatically beat LTR net, unless revenue assumptions are conservative and building STR rules are confirmed. Many investors choose LTR for operational simplicity.
See Gross vs Net Yield Dubai for STR vs LTR comparison tables.
How should you structure a yield spreadsheet?
Invest Gulf’s 2026 answer: How should you structure a yield spreadsheet requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Keep tabs for gross and net, sensitivity on rent minus 10%, and service charges plus 20%.
Save sensitivity tabs: rent −10%, charges +20%, vacancy +3 points.
What are common Dubai yield calculation mistakes?
Invest Gulf’s 2026 answer: What are common Dubai yield calculation mistakes requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Using portal asking rents, zero vacancy, or citywide service charge averages are the three errors that inflate yields most.
For buyer behaviour errors beyond math, see Mistakes Foreign Buyers Make in Dubai Property.
How should you assess: Gross and net yield answer different investment questions?
Invest Gulf’s 2026 answer: How should you assess: Gross and net yield answer different investment questions requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
The Gross vs Net Rental Yield in Dubai guide explains why the gap exists, service charge physics, vacancy behaviour, and STR cost layers. This guide shows how to compute it on your deal.
How do yields vary by Dubai community?
Invest Gulf’s 2026 answer: How do yields vary by Dubai community requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Mid-market communities often show higher gross yields than Marina or Downtown, but service charge intensity reverses some of that gap on net.
| Community | Typical gross (studios/1BR) | Service charge sensitivity |
|---|---|---|
| JVC | 7-9% | Moderate |
| Sports City | 7.5-9% | Moderate-low |
| Business Bay | 6-7.5% | Moderate-high |
| Dubai Marina | 5.5-7% | High |
| Downtown | 5-6.5% | Very high |
| Meraas (City Walk) | 5.5-7% | Premium |
See Highest Rental Yield Areas Dubai for ranked communities.
How does home-country tax affect Dubai yield?
Invest Gulf’s 2026 answer: How does home-country tax affect Dubai yield requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
UAE rental income may still be taxable at home. Model after-tax cash flow if you are not UAE tax resident.
How do you model yield on off-plan purchases?
Invest Gulf’s 2026 answer: How do you model yield on off-plan purchases requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Include months without rent, handover fit-out, and registration costs already paid when you forecast year-one yield.
- Months to handover without rent
- Service charge deposit at handover
- Snagging and fit-out costs
- DLD/Oqood already in acquisition cost
Off-plan yield is a forecast, label it accordingly.
What checklist should you run before trusting a yield quote?
Invest Gulf’s 2026 answer: What checklist should you run before trusting a yield quote requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Confirm Ejari rent, Mollak charges, vacancy assumption, and whether the broker used price or total acquisition cost.
What should you verify before trusting a Dubai yield summary?
Invest Gulf’s 2026 answer: What should you verify before trusting a Dubai yield summary requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Label gross and net explicitly and stress-test service charges before you compare communities.
The AED 850,000 JVC example shows how 7.3% gross becomes ~4.7% net on deployed capital, still viable for many investors, but only if you planned for 4.7%, not 7.3%.
How do you model multi-year cash flow?
Invest Gulf’s 2026 answer: How do you model multi-year cash flow requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Layer RERA rent caps, service charge inflation, and capex for appliances and AC replacement across years two to five.
| Year | Variable |
|---|---|
| 1 | Furnishing, snagging, initial void |
| 2-3 | RERA rent increase caps on renewal |
| 3-5 | Service charge inflation (often 3-5% annually) |
| Any | Special levies, AC replacement, appliance cycles |
RERA Decree 43/2013 rent calculator sets renewal increase ceilings based on current rent vs market index, your income growth is regulated, not market-free.
How should you assess: Worked example: premium tower with high service charges?
Invest Gulf’s 2026 answer: How should you assess: Worked example: premium tower with high service charges requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Premium towers can show attractive gross yields that fall below 4% net once AED 25+ per sqft service charges apply.
Premium location does not automatically mean premium net yield. This is why Gross vs Net Yield Dubai stresses building-specific charge pulls.
What nationality-specific planning mistakes show up in yield models?
Invest Gulf’s 2026 answer: What nationality-specific planning mistakes show up in yield models requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Non-resident buyers sometimes omit management fees or assume home-country mortgage rules on UAE LTV. Model UAE costs only.
How do you use yield to compare Dubai vs Abu Dhabi stock?
Invest Gulf’s 2026 answer: How do you use yield to compare Dubai vs Abu Dhabi stock requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Keep formulas identical; swap DMT registration, service charge sources, and liquidity assumptions.
| Input | Dubai | Abu Dhabi (e.g. Aldar) |
|---|---|---|
| Registration cost | DLD 4% | DMT schedule |
| Rent data | Ejari / REST | DMT/agent comparables |
| Yield band | 5-9% gross mid-market | 6-7% gross often cited |
| Liquidity | Highest | Moderate |
See Dubai Property Investment Guide for Abu Dhabi developer context.
What belongs on a Dubai yield quick reference card?
Invest Gulf’s 2026 answer: What belongs on a Dubai yield quick reference card requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Gross formula, net formula, default vacancy band, and reminder to pull Mollak for the exact building.
What verification checklist closes a Dubai yield calculation?
Invest Gulf’s 2026 answer: What verification checklist closes a Dubai yield calculation requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Ejari rent sourced, charges building-specific, net on total cost calculated, sensitivity run.
What Dubai yield inputs should you budget in 2026?
Invest Gulf’s 2026 answer: What Dubai yield inputs should you budget in 2026 requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Budget service charges, 5% to 8% management if outsourced, 7% to 8% vacancy unless you have building history, and maintenance provision.
Citable factual block 1
Dubai rental yield becomes comparable only when the denominator matches the cash actually committed. Dubai Land Department transfer charges are commonly modelled at 4% of the purchase price on a resale, while trustee, broker, and financing fees vary by transaction. A buyer comparing an AED 850,000 apartment with AED 62,000 annual rent should record both the 7.29% gross yield on price and the lower result after service charges, vacancy, management, and acquisition costs. Dubai REST, the RERA Rental Index, and the building’s Mollak service-charge record are the relevant evidence sources. Portal asking rents are not proof of a signed tenancy. Source check: Dubai Land Department and RERA publications, plus the current building record, should be saved with the model before an offer is made. Review the evidence every 12 months, and record the date, source, unit, applicant, and assumptions in the decision file.
Citable factual block 2
Dubai short-term rental forecasts must be separated from long-term tenancy forecasts because the operating costs and evidence trail are different. A long-term model can begin with an Ejari-backed annual rent, building service charges, a vacancy allowance, and management fees. A short-term model also needs confirmed building rules, Dubai Department of Economy and Tourism licensing requirements, higher management costs, furnishing, utilities, and seasonal revenue assumptions. An illustrative 7.3% gross figure is not a net return, and a one-week gap between tenancies changes the annual income result. Insider tip: ask for the actual Mollak schedule and a recent Ejari comparable before accepting a yield slide. Source check: Dubai REST, RERA, Mollak, and DET are the records that should support each input. Review the evidence every 12 months, and record the date, source, unit, applicant, and assumptions in the decision file.
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Frequently Asked Questions
Gross rental yield = (Annual rental income ÷ Purchase price) × 100. Example: AED 60,000 annual rent on a AED 800,000 apartment = 7.5% gross yield. Use Ejari-registered or RERA transacted rents, not Property Finder listing prices, which typically run 5-10% higher than achieved rents.
Net rental yield = (Annual rent − Service charges − Management fees − Vacancy allowance − Maintenance − Licensing costs if STR) ÷ Total acquisition cost × 100. Total acquisition cost should include purchase price plus DLD 4% and closing fees if you want yield on capital actually deployed.
The main deductions are: service charges (often AED 12-25/sqft/year in mid-market towers), property management (5-8% of rent for long-term lets), vacancy (realistically 4-8% of potential rent), maintenance provisions (AED 3,000-8,000/year on apartments), Ejari registration, and for short-term lets, DET permit fees, Tourism Dirham, and higher management percentages.
Both are valid, but label them clearly. Brokers quote yield on purchase price only. Conservative investors use total acquisition cost (price + 4% DLD + trustee + broker on secondary purchases) because that reflects cash actually invested. The difference is often 0.3-0.5 percentage points on net yield.
Use RERA Ejari transacted data via the Dubai REST app, RERA Rental Index publications, and sold-rent comparables from licensed agents with Ejari history. Avoid calculating yield from Bayut or Property Finder advertised rents without discounting to transacted levels.
For well-located long-term rentals in established communities, use 4-5% vacancy (roughly 2-3 weeks between tenancies). For citywide mid-market averages, 7-8% is more honest. Supply-heavy micro-locations or poor pricing can push effective vacancy to 10-12%.
Typically 1.5-3 percentage points for long-term lets in mid-market towers with moderate service charges. Premium buildings with AED 25-35/sqft service charges can see 3-4 point gaps. A marketed 8% gross often becomes 5.5-6.5% net, sometimes lower on total acquisition cost.
Yes, the formula is identical. Change the inputs: Abu Dhabi service charges, DMT registration costs instead of DLD-only modelling, and local tenancy data sources. Dubai has the deepest published rental data; other emirates may require more agent-sourced comparables.
Which key numbers should you model before you buy?
Invest Gulf’s 2026 answer: Which key numbers should you model before you buy requires a documented decision for foreign buyers based on the exact rule, price, or contract that applies. Review official evidence every 12 months, model all cash costs, and keep a fallback before you transfer funds or sign.
- 12-month evidence check: keep the official document and yield data model together.
Registered rent, all-in acquisition cost with about 4% DLD on typical resale purchases, and three-year charge inflation.
Use RERA Form F on resale and Oqood on off-plan before you treat broker yield slides as final.
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