Rental yield is thrown around constantly in Dubai property marketing, but it's worth understanding exactly what the number means — and what it often leaves out — before you use it to compare investments.
Gross rental yield is calculated as annual rental income divided by the property's purchase price, expressed as a percentage. It's quick to calculate and useful for a first-pass comparison, but it ignores every ongoing cost of actually owning the property.
Net yield subtracts annual costs — service charges, maintenance, any owners' association fees, insurance, and periods of vacancy — from the rental income before dividing by the purchase price (plus, ideally, transaction costs like DLD fees). It's more work to calculate, but it's the number that actually reflects your real return.
A property with a slightly lower headline yield but genuinely lower service charges and stronger tenant demand can easily outperform a higher-yield property with hidden costs — the honest number is always worth the extra calculation.
