How to Calculate Rental Yield in Dubai

Reviewed and updated: 24 August 2026

To calculate rental yield in Dubai, separate gross yield from net yield. Gross yield uses annual rent and purchase price. Net yield subtracts the recurring costs that reduce the owner’s actual income.

The formula is simple. The difficult part is using realistic inputs.

Gross rental yield formula

Annual rent ÷ purchase price × 100 = gross rental yield

Illustrative example only: if a property costs AED 1,000,000 and the annual rent is AED 80,000, the gross yield is 8 percent.

That figure does not account for service charges, maintenance, vacancy or other ownership costs. It should not be presented as the expected return.

Net rental yield formula

Annual rent minus recurring annual costs ÷ total acquisition cost × 100 = net rental yield

Using the same illustration, assume recurring costs of AED 15,000. Net rental income would be AED 65,000. If the example uses the AED 1,000,000 purchase price as a simplified denominator, the net yield would be 6.5 percent.

A complete model may use the total acquisition cost rather than the advertised price alone. Keep the method consistent when comparing properties.

Costs that can change the result

Service charges.
Routine maintenance and repairs.
Property management where used.
Vacancy between tenancies.
Leasing and renewal expenses where applicable.
Insurance and other property-specific costs.
Furnishing replacement for a furnished unit.

Use the Dubai Land Department service charge index where it applies. Confirm the actual building and year rather than using a citywide assumption.

Use a realistic rent

An asking rent is not the same as an agreed rent. Review current official rental information and comparable properties. Then model at least three cases: cautious, base and optimistic.

The cautious case is often the most useful. It shows whether the property still works with a lower rent or a longer vacant period.

Do not ignore vacancy

A property is unlikely to be occupied every day forever. Tenant changes, maintenance and market conditions may create vacant periods.

One simple approach is to reduce the expected annual rent before calculating net yield. Another is to include a separate vacancy allowance in the cost model. Use one method consistently to avoid counting the same risk twice.

Yield is not total return

Rental yield measures income against cost. It does not include a future sale price unless you build a separate total-return model. Property value can rise or fall, and selling involves time and costs.

A high advertised yield may also reflect higher risk, weaker resale demand, intensive management or an optimistic rent assumption.

Compare like with like

Use the same gross or net formula for every option.
Use the same treatment of acquisition costs.
Use rents from a similar property type and location.
Include service charges from the specific building where possible.
State whether the unit is furnished, completed or off-plan.

A simple review table

Purchase price and other acquisition costs.
Evidence-based annual rent.
Expected occupancy.
Service charges and maintenance.
Gross yield.
Net yield.
Cautious scenario result.

Use Dubai Property Market for market context, Areas & Communities for local comparisons and Dubai Property Due Diligence Checklist before relying on the calculation.

Official sources

The figures above are hypothetical examples, not market statistics or return forecasts. This guide provides general information, not legal, financial or investment advice. Verify current rent and costs for the specific property. Returns are not guaranteed.