The formula
Gross rental yield = (annual rent ÷ property price) × 100.
Worked example: a one-bedroom apartment purchased at AED 1,200,000 and let at AED 84,000 per year has a gross yield of 7.0%. A second apartment at AED 2,000,000 let at AED 130,000 per year yields 6.5%. On gross yield alone, the first looks better.
That comparison is only valid if both figures use recorded rents and recorded prices for comparable units over comparable periods. Mixing an advertised rent with a recorded price, or a current rent with a two-year-old purchase price, produces a number that means nothing.
Gross yield versus net yield
Net yield deducts the costs of ownership from the rent before dividing by price: service charges, management fees, maintenance, insurance, vacancy allowance and, if relevant, financing costs.
The gap between gross and net is not trivial. Service charges alone vary substantially between buildings, and a building with high service charges can turn an attractive gross yield into a mediocre net one. This is why PropertyMetric publishes gross yield, states clearly what it excludes, and does not publish net yield figures — net yield depends on costs specific to the individual property and owner, which market data does not contain.
How to compare yields across areas properly
- Use recorded rents and recorded prices, not advertised figures, on both sides of the calculation.
- Hold property type and bedroom count constant — a studio yield and a villa yield are not comparable.
- Use the same period for rent and price, and the same period across every area compared.
- Check the sample size behind both the rent median and the price median.
- Then look at transaction volume: a yield advantage in an illiquid community carries exit risk the yield figure does not show.
Why the highest yield is often not the best investment
Gross yield is rent over price, so it rises when price is low relative to rent. Price can be low for reasons that matter: older stock with higher maintenance needs, high service charges, weaker tenant demand, longer void periods, a large incoming supply pipeline, or simply a community where few properties trade and selling takes longer.
A sensible way to use yield is as a screening tool: rank the options, then investigate why the top-ranked ones rank where they do. If a community shows a yield well above its peers, the useful question is not "how do I buy there" but "what explains the discount".