Dubai Rental Yield Calculator (2025): Net ROI, Cash-on-Cash & DSCR

Start with annual market rent for a 12-month lease on comparable units. Deduct a realistic vacancy allowance—one month for well-located apartments, possibly more for villas or seasonal areas. From the remaining effective rent, subtract all operating costs you, the owner, carry: service charges (community OPEX charged per square foot), property management fees (and any initial leasing fee), an annual maintenance reserve (2–4% of rent; higher for villas), insurance, and small admin. The result is your Net Operating Income (NOI). Net rental yield is then NOI divided by the purchase price (your all-in basis if you want to be strict, including registration, trustee, NOC and agency). This property-only metric excludes financing so you can compare assets cleanly. If you plan to mortgage, compute DSCR and cash-on-cash separately using NOI and Year-1 debt service to see whether the same unit still clears your return hurdles.

Gross yield is simple: annual rent divided by purchase price. It’s useful for quick scans but ignores costs, so it can flatter high-OPEX buildings. Net yield subtracts recurring owner costs—service charges, management, maintenance, insurance—before dividing by price; it reflects how much the property truly earns before financing and taxes. Cap rate is essentially the same as net yield when computed as NOI divided by price; analysts use it as a property-only return to compare assets and neighborhoods. Why the three? Because you need all levels of signal: gross tells you rent power, net/cap tell you operational efficiency, and your mortgage metrics (cash-on-cash, DSCR) tell you equity efficiency. If an asset shines on gross but collapses on net, OPEX is killing it; if net is fine but cash-on-cash is weak, the debt stack or entry costs are the friction to fix. Dubai Rental Yield Calculator.

Treat these as first-class citizens in your model. Vacancy: use recent absorption and your unit’s micro-location to set a realistic assumption—one month for liquid 1–2BR apartments is common; add a safety margin if supply is rising. Service charges: obtain the latest AED/sqft budget from the community manager and multiply by your unit’s internal area; adjust upward if amenities are heavy or recent inflation suggests increases. Management: include an ongoing percentage of rent for property management plus an initial leasing fee (often a fraction of annual rent) for tenant placement. Don’t forget maintenance reserves—apartment internals are lighter; villas carry landscaping, pools and AC loads. Run a sensitivity: add 10% to service charges, one extra vacancy month, and see if your DSCR and cash-on-cash still hold. If not, renegotiate price, switch buildings, or pass. Discipline beats optimism, every time.

It depends on your horizon and strategy. Cash-on-cash measures Year-1 equity yield: (NOI − debt service) divided by your total cash invested (down payment + entry fees). It’s perfect for income-focused investors and early health checks; lenders also care because it correlates with cushion. IRR folds time and exit into the equation, discounting all cash flows, including sale proceeds after fees and loan payoff. If you plan upgrades, hold-to-refi, or a defined exit, IRR captures value creation better—especially for off-plan to ready transitions or repositioning of tired stock. Practically, screen deals with net yield and DSCR; if they pass, ensure cash-on-cash meets your hurdle; then run IRR with conservative exit assumptions. When in doubt, buy for durable rentability and a strong basis; time can heal a lot, but only if the cash flow survives the journey.

“Good” is contextual. For core, liquid 1–2BR apartments in established districts, many investors target mid-single-digit net yields with stable occupancy; gross may look higher but OPEX trims it. Branded or resort-style buildings can command premiums in rent but also charge heavier service fees—stress-test net. Villas often deliver lower current yield but compensate via lifestyle utility or potential capital appreciation. Your benchmark should be: (1) the best alternative use of your capital (risk-adjusted), (2) comparable buildings’ net yields today, and (3) the same unit under different entry prices. If the model only works at aggressive rent or minimal vacancy, it’s fragile. Run a comp set: three rents, three recent sales, and the actual service-charge budget. If your net yield clears your hurdle after adding one month of vacancy and a 10% OPEX bump, you have a good yield for Dubai—because it’s resilient, not theoretical. Dubai Rental Yield Calculator.