Return on investment is one of the most talked-about numbers in Dubai real estate, yet many buyers calculate it incorrectly by only looking at purchase price versus rental income. A proper ROI calculation needs to account for every cost involved in acquiring and running the property.
Start with the full acquisition cost, not just the sale price. This includes the Dubai Land Department (DLD) transfer fee, typically 4% of the property value, along with the agent’s commission, usually around 2%. These costs are easy to forget in early planning, but they directly reduce your effective return.
Once you have the true acquisition cost, calculate your net annual rental income by subtracting service charges, maintenance, and any vacancy periods from your gross rent. Dividing that net income by your total acquisition cost gives you a realistic net yield, a far more useful number than the gross yield often advertised in listings.
It’s also worth running the numbers on a few different scenarios, such as a conservative rent estimate and a higher one, so you understand the range of outcomes rather than relying on a single optimistic figure. A property that only makes sense under best-case assumptions carries more risk than one that performs well even in a cautious scenario.
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A worked example of net operating yield
Illustrative example: purchase price AED 1,000,000, acquisition costs AED 65,000 and annual rent AED 80,000. Assume 30 vacant days, AED 15,000 service charges, AED 2,000 maintenance, AED 1,000 management and AED 500 insurance. Budgeted collected rent is about AED 73,425; net operating income is about AED 54,925. Net operating yield on AED 1,065,000 acquisition cost is about 5.16%, compared with an 8% gross yield on price. These are assumptions for arithmetic, not a market quote. Mortgage payments and appreciation are separate.
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Evidence checklist added 2 October 2026. Examples are illustrative; use verified figures for the property you are assessing.