Gross Rental Yield in Dubai: Formula and Examples
The gross yield formula with worked examples, the difference between gross and net, and why the highest yield in a list is rarely the best investment.
Yield is the number most often quoted in Dubai property investment and the one least often defined. Getting the definition right removes most of the confusion that follows.
The formula
Gross rental yield = (annual rent ÷ property price) × 100.
Example one: a property priced at AED 1,000,000 let at AED 75,000 per year gives a gross yield of 7.5%.
Example two: a property priced at AED 2,400,000 let at AED 150,000 per year gives 6.25%.
Example three: a property priced at AED 650,000 let at AED 58,500 per year gives 9.0%.
On gross yield alone, the third option ranks first. Whether it is the best investment is a separate question that gross yield cannot answer.
What gross yield leaves out
Net yield deducts these from the rent before dividing by price. The gap between gross and net is not a rounding difference; in a building with high service charges and significant vacancy it can be a large share of the headline figure.
- Service charges, which vary substantially between buildings and are paid by the owner.
- Management and agency fees for letting and re-letting.
- Vacancy — the periods when the property earns nothing between tenancies.
- Maintenance and repairs, which rise with the age of the stock.
- Transaction costs on both purchase and eventual sale.
- Financing costs, where the purchase is leveraged.
Why we publish gross and not net
Net yield depends on costs specific to the individual property and owner: the building’s actual service charge, the owner’s financing, their management arrangement, and realistic vacancy for that unit. Market data does not contain any of that.
Publishing a "net yield" computed from assumed costs would produce a precise-looking number resting on invented inputs. We publish gross yield, state clearly what it excludes, and leave the cost side to the inputs only you have.
Reading a yield ranking properly
Use gross yield as a screen, then ask why the top-ranked options rank where they do. A yield well above comparable communities usually reflects something: older stock, high service charges, weaker tenant demand, longer voids, a large incoming pipeline, or low liquidity.
Pair the yield with transaction volume. An attractive yield in a community where very little trades carries exit risk that the yield number does not show.
This article explains method rather than forecasting the market. For definitions and how measures are computed, see our data methodology and data coverage.