Rental Yields in the UAE: How to Calculate & Compare
In short: Rental yield is the annual rental income of a property expressed as a percentage of its purchase price; UAE gross yields typically range from 5% to 8%.
Rental yield is the single most useful number for comparing income-producing properties. It tells you how hard your money works, independent of price.
This guide shows how to calculate gross and net yield, what a good yield looks like in the UAE, and the costs that quietly reduce your real return.
Key concepts
- Gross yield
- Annual rent ÷ purchase price × 100. Simple but ignores costs.
- Net yield
- (Annual rent − annual costs) ÷ purchase price × 100. The number that matters.
- Void period
- Time the property sits empty between tenants, reducing actual income.
The formulas
Gross yield = (Annual rent ÷ Purchase price) × 100.
Net yield = ((Annual rent − Service charge − Management − Maintenance) ÷ Purchase price) × 100.
Example: a AED 1,000,000 apartment renting for AED 70,000/year has a 7% gross yield. After AED 12,000 of annual costs, net yield is 5.8%.
What counts as a good yield?
Benchmarks for the UAE market:
| Gross yield | Assessment |
|---|---|
| Below 5% | Below market - appreciation play |
| 5–6% | Solid, in line with market |
| 6–8% | Strong income property |
| Above 8% | High - verify demand & costs |
Costs that reduce your yield
Always subtract these before trusting a headline yield:
- Service / community charges (per sq ft, annual).
- Property management fee (often 5–8% of rent).
- Maintenance and repairs.
- Void periods between tenants.
- Chiller / cooling charges where not tenant-paid.
Key takeaways
- Gross yield is a screening tool; net yield is the real return.
- 6%+ gross yield is strong for the UAE.
- Service charges and management fees can cut 1–2% off gross yield.
- Factor in void periods - no property is rented 100% of the time.