Is Dubai real estate profitable? Calculate the net rental return

Dubai property can produce rental income, but the result depends on the purchase price, rent actually collected and the costs of owning that particular unit. An advertised gross yield is only a starting point. Calculate the cash left after vacancy and operating costs, then compare it with the full amount invested.

The two examples below explain the calculation. All amounts are hypothetical. They are not Livrichy client transactions, Dubai market averages or forecasts. Both assume a cash purchase of a completed apartment for long-term rental, before financing and taxes. They exclude any future gain or loss on resale.

How to calculate gross and net rental yield

Gross rental yield = annual rent at full occupancy ÷ purchase price × 100. This headline figure ignores vacancy and expenses.

Modelled net cash yield = cash remaining after vacancy and annual operating costs ÷ total acquisition cost × 100. Here, total acquisition cost means the purchase price plus one-off buying costs. The annual budget also includes a maintenance reserve, so this is a planning measure rather than an accounting statement of net operating income.

Use the same definitions for every property you compare. A percentage based on the purchase price alone is not directly comparable with one based on all the capital invested.

Example A: 8% gross becomes 4.88% after the modelled costs

Illustrative assumptions — not a real property or an offer.

• Purchase price: AED 1,500,000.
• Assumed one-off buying costs: AED 100,000.
• Total capital invested: AED 1,600,000.
• Annual rent at full occupancy: AED 120,000.
• One month without a tenant: AED 10,000 of rent not received.
• Rent collected: AED 110,000.

The annual owner budget is AED 18,000 for service charges, AED 6,000 for management, AED 6,000 reserved for maintenance and AED 2,000 for insurance and other costs: AED 32,000 in total. These are assumed fixed budgets, not supplier quotations or standard fee rates.

Cash remaining: AED 120,000 − AED 10,000 − AED 32,000 = AED 78,000.

Gross yield: AED 120,000 ÷ AED 1,500,000 = 8.00%. Modelled net cash yield: AED 78,000 ÷ AED 1,600,000 = 4.88%, rounded to two decimals.

Example B: a higher gross yield, but less cash left

Illustrative assumptions — not a real property or an offer. The purchase price and total acquisition cost stay the same as in Example A.

• Annual rent at full occupancy: AED 132,000.
• Two months without a tenant: AED 22,000 of rent not received.
• Rent collected: AED 110,000.
• Annual service charges: AED 30,000.
• Management budget: AED 6,600.
• Maintenance reserve: AED 10,000.
• Insurance and other costs: AED 2,000.

The annual owner budget totals AED 48,600. Cash remaining: AED 132,000 − AED 22,000 − AED 48,600 = AED 61,400.

Gross yield: AED 132,000 ÷ AED 1,500,000 = 8.80%. Modelled net cash yield: AED 61,400 ÷ AED 1,600,000 = 3.84%, rounded to two decimals.

Example B advertises a higher rent, yet leaves AED 16,600 less per year under these assumptions. Vacancy and running costs explain the difference. The AED 100,000 buying-cost allowance in both examples is an assumed combined budget, not a Dubai Land Department tariff. Replace it with an itemised quotation for the actual transaction.

What happens if the apartment stays empty longer?

In Example A, one additional vacant month reduces collected rent by AED 10,000. If the other budgets stay unchanged, cash remaining falls to AED 68,000 and the modelled net cash yield becomes 4.25%. That is a fall of 0.63 percentage points from the rounded base case.

Before buying, repeat the calculation with a lower rent, a longer vacancy and an unexpected repair. For a financed purchase, separately deduct debt payments and calculate the return on your own invested cash. That is a different measure from the all-cash examples above.

Which numbers should you verify for a real apartment?

1. Rent: check the existing tenancy contract and payment record, or comparable rental evidence. An asking rent is not proof of rent collected.
2. Service charges: check the building and budget year in the Dubai Land Department Mollak Service Charge Index, then request the unit's statements and any outstanding amounts. Mollak provides RERA-approved service-charge rates.
3. Buying costs: use the official DLD property sale registration service and written quotations for the other applicable transaction costs.
4. Owner expenses: identify who pays for utilities, cooling, management, insurance, repairs and tenant changeovers. Include furnishing and initial works if they are needed.
5. Exit assumptions: keep a possible resale gain separate from rental income. A sale price, selling costs and the time needed to sell can change the overall result.

Our guide to apartment ownership costs explains the documents and expense categories in more detail.

Can you compare an off-plan project with a rented apartment?

You can compare them as investment choices, but the cash-flow timelines differ. A completed apartment may have a verifiable lease and current running costs. An off-plan project needs a payment schedule, handover assumptions and a separate post-handover rental scenario. Do not count projected rent as income received during construction.

Compare specific buildings and units within Dubai Hills Estate or Dubai Marina, rather than assigning one yield to an entire area. Commercial property also needs its own lease and expense analysis; the residential examples above do not establish a commercial return.

Start with a property and a documented budget

Browse current properties for sale, or tell us your budget and investment plans. Use the shortlist to collect the rent, charges and buying-cost evidence for each unit before choosing it.

Calculations and linked sources checked on 9 October 2026. The model inputs are invented for explanation; the linked official sources support the verification process, not those input amounts.