When a client shows me a listing promising an “8% yield”, my first question is always the same: gross or net? The gap is often a couple of percentage points, and it changes how the property stacks up against anything else you could do with the money. The UAE has no annual property tax, but that does not mean every dirham of rent is profit.
Gross yield: the brochure number
Gross yield is simply annual rent divided by purchase price. An apartment bought for AED 2 million and let for AED 120,000 a year yields 6% gross. It is a fair way to compare areas at a glance. It tells you nothing about what you actually keep, because it ignores everything you pay as an owner.
What to deduct to get to net
Net yield is what remains once the annual running costs come off the rent. These are the lines I always check:
- Service charges: the annual fee for running the building, set per square foot. They often land between AED 10 and AED 30 per sq ft, and vary widely from one tower to the next, so check the approved rate in the Dubai Land Department’s official index
- Property management: broadly 5–8% of rent on an annual tenancy, and 15–25% of revenue for a holiday home
- In-unit maintenance: air conditioning, small repairs, repainting between tenants. Service charges do not cover it
- Vacancy: one empty month costs more than 8% of the annual rent
- Unit insurance and, if you have a mortgage, the interest
One item that often causes confusion is the 5% housing fee on the DEWA bill. If the property is rented out, the tenant pays it, so it does not touch your net return. If you live there yourself, it is yours to pay, based on the estimated rental value.
A worked example
Take a purely illustrative case, not tied to any specific project: a ready apartment at AED 2,000,000, 1,000 sq ft, let at AED 120,000 a year. Gross yield: 6%.
Now the costs. Service charges at AED 18 per sq ft: 18,000. Management at 5%: 6,000. Maintenance and insurance: 5,000. One month of vacancy: 10,000. That leaves AED 81,000, or about 4% on the price.
But your capital is more than the price. Add the 4% Dubai Land Department fee, a 2% agency commission plus VAT and the transfer costs, and you are at roughly AED 2,125,000. The real net yield drops to around 3.8%. For the full list of purchase costs, see my guide to the cost of buying property in Dubai.
Why net matters even more right now
This year has been a reminder that rent is not a constant. Market analyses published for the third quarter put Dubai apartment rents at roughly 7% below a year earlier, while Cavendish Maxwell counted about 38,000 new homes delivered in the first nine months of 2026, up 41% on the same period of 2025. More supply means more choice for tenants.
There is a regulatory ceiling too. On renewal, rent can only rise within the bands of the official RERA index, and only with at least 90 days’ notice. So I never build a plan around automatic increases.
Off-plan changes the maths again. There is no rent during construction, and your return depends on the entry price, the payment plan and the value at handover. I measure it against the capital actually paid in and the time it stays tied up. If you are weighing long-term against short-term letting, I compared them in annual rental or holiday home.
How I assess it for my clients
I start from rents actually registered in the building or nearby, never the brochure figure. I ask for the service charge rate, allow for at least one empty month, and calculate net on both the price and the total capital. Then I run two or three alternatives through the same method. Quite often a smaller unit in an established area beats a more prestigious one with heavy service charges. If you already own in Dubai, I can help you work out whether to resell or rent.
As things stand, individuals in the UAE pay no tax on rental income. If you are tax resident elsewhere, ask your own tax adviser how that income is treated at home. The net figure that matters is the one after your own taxes.
Want to run the numbers on a real property? Try the ROI and mortgage calculators, browse the off-plan projects, book a private call or message me on WhatsApp.
