When an agent quotes you 8%, ask one question: gross or net? Almost always it is gross. Gross yield is annual rent divided by price, nothing taken out. It is the headline number on every portal, and it overstates what you keep because it ignores every cost the property carries. The net yield calculator closes that gap and hands you a number you can actually plan around.
Gross is the headline, net is the truth
The gap between these two numbers is the gap between the advert and reality. Gross yield is a simple ratio that ignores cost. Net yield is what is left after every cost of holding the property comes out. In Dubai that gap can be a full point or two, and that point is what separates a good decision from one you regret.
The calculator starts from two inputs: property value and annual rent. Those give you the gross yield instantly. Then it subtracts the cost lines a portal listing never mentions:
- **Service charge.** The annual building fee. The single biggest drag on Dubai yields, and the one most buyers forget.
- **Property management.** 5 to 8% of rent if you use an external manager. Switch it off if you self-manage.
- **Vacancy reserve.** A buffer for the weeks a unit sits empty between tenants. 2 to 4 weeks a year is realistic.
- **Maintenance reserve.** 8 to 10% of rent for minor repairs and routine upkeep.
Management, vacancy and maintenance are each a percentage of rent, so they scale with income. Service charge is a fixed annual figure that does not move with rent. Add them up, subtract from rent, divide by price, and you have your net yield. That is the number I work from with clients, not the portal number. For the background, read yield explained.
Why net yield is the right number to decide on
Picture two properties that both show 8% in the advert. One sits in a building with a long list of amenities and a heavy service charge. The other is in a simpler building with a low charge. On the gross number they look identical. After the charge comes out, one might land at 5% net and the other at 7%. Only the net figure surfaces that difference and tells you which property actually puts more money in your pocket.
Net yield also gives you a fair basis for comparing one area against another, and one unit against another. Once every cost is accounted for, you stop getting fooled by a building that posts a high rent while its service charge eats most of that rent. This is why I never let a client decide on the gross number alone.
A worked example
Take a Dh1,000,000 apartment renting at Dh80,000 a year. The portal shows 8% gross. Now say the service charge is Dh15,000 for the year. Subtract it from the rent: Dh80,000 minus Dh15,000 is Dh65,000. Divide by the Dh1,000,000 price and you get 6.5% net.
That is a full 1.5 points gone to one cost line, before you add management or vacancy. Add an external manager and a vacancy buffer and the net figure drops further still. This is exactly why you should always keep distance between the advert number and the number that actually reaches your account.
The 25% balcony rule and per-sqft mode
Most buyers do not know you pay service charge on only 25% of the balcony area in Dubai. The calculator handles this. Flip the service charge input to **Per sqft** mode and enter the rate per sqft, your living area, and your balcony area. With the 25% balcony rule on, the tool charges the full living area plus a quarter of the balcony. So a 900 sqft unit with a 120 sqft balcony is charged on 930 sqft, not 1,020.
Use per-sqft mode when you have the building rate card but not the lump sum. Use lump-sum mode when you have the annual invoice. Both modes reach the same answer; only the path differs.
Net yield is one half of the return
Remember that net yield is only half of your return. The other half is how the property grows in value over time. One property might post a modest net yield but sit in an area where prices climb fast, while another posts a high net yield with slower price growth. The right call depends on whether you want current income or capital growth. In ROI vs rental yield I explain how the two trade off. Run the net yield first, then set it against the price-growth outlook for that community so you have the full picture before you sign.
Source: hoomanjt.com/tools/yield
Frequently asked questions
Gross yield is annual rent divided by price with nothing taken out; it is the headline number on every portal. Net yield is what is left after service charge, management, vacancy, and maintenance come out. In Dubai the gap between the two can be a full point or two, and that gap is what separates a good decision from one you regret.
Four lines: the annual service charge (the single biggest drag on Dubai yields), property management at 5 to 8 percent of rent if you use an external manager, a vacancy reserve for the 2 to 4 weeks a year a unit realistically sits empty, and a maintenance reserve of 8 to 10 percent of rent for minor repairs and upkeep.
As a gross number in the highest yielding areas, yes; as a net number, rarely. When an agent quotes 8 percent, ask whether it is gross or net, because it is almost always gross and ignores every cost the property carries. For the current per-area gross figures with a fixed methodology, see the Dubai Rental Yield Index.
Use my free net rental yield calculator. Enter the property value and annual rent for the instant gross figure, then add the service charge and optional cost lines, and it shows net yield plus a month by month cash flow chart with your cheque schedule.