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

Start with realistic annual market rent for a 12-month lease on comparable units. Deduct an evidence-based vacancy allowance—one month is common for liquid 1–2BR apartments; villas or seasonal sub-markets may require more. From the resulting effective rent, subtract owner OPEX you actually carry: service charges (AED/sqft × internal area), property management fees (plus any letting/renewal fee), a maintenance reserve (2–4% of rent—higher for villas), insurance, and small admin. The result is NOI. Compute net rental yield as NOI divided by your purchase price (strict analysts use all-in basis including DLD, trustee, agency and mortgage registration). This yields a clean, property-only return, excluding financing. If you’ll use debt, layer DSCR (NOI ÷ annual debt service) and cash-on-cash ((NOI − debt) ÷ total cash in). The discipline: use rents from the last 60–90 days, not aspirational asks; plug the current service-charge budget; and run a quick sensitivity on vacancy and OPEX.

Model a baseline stack: DLD registration ~4% of price, trustee office fee, developer NOC (secondary), agency commission (often ~2% + VAT), and—if financed—mortgage registration ~0.25% of the loan, bank processing, and a valuation fee. Add a modest “other/buffer” line for courier, attestation, and incidentals. Promotions can improve cash-to-close but rarely change operating performance: a DLD-subsidy lowers entry friction yet your Year-1 net yield still hinges on rent, service charges, and vacancy. Treat incentives as a bonus, not a reason to overpay on the base price. If you’re comparing two “discounted” off-plan options, normalise by calculating the effective price (headline minus monetised incentives) and then re-run net yield/DSCR. Finally, remember timing: incentives that defer cash (e.g., post-handover plans) shift when you pay, but they don’t eliminate cost. Cash flow matters—price discipline matters more.

Debt shape drives both risk and return. A fixed-rate intro (two to five years) stabilises payments while you season the asset; at reset, loans often float to a benchmark plus margin—model that path before signing. Variable can price keener initially and benefit if benchmarks fall, but demands buffer for volatility. LTV sets leverage and cash in: higher LTV lifts cash-on-cash when rents are strong but compresses DSCR and resilience; non-residents usually face lower LTV caps. Term extends amortisation, lowering monthly debt service and raising DSCR—but may increase interest paid over life. Compare total cost of credit (rate, fees, insurance, prepayment penalties). If your income currency differs from AED, account for FX risk alongside rate risk. Practical playbook: pre-approve, get the lender’s full fee sheet in writing, and run sensitivity of +/- 1% on the rate and +/- one month of vacancy. If DSCR falls below ~1.20–1.25, your file is fragile.

Treat these as first-order drivers, not footnotes. Service charges: request the latest AED/sqft budget from the manager, multiply by internal area, and add 10–15% for prudence—amenity-heavy towers cost more to run. Vacancy: use absorption data and your micro-location; a month per year is common for liquid 1–2BR apartments, but seasonal or over-supplied pockets may need more. Management: include an ongoing % of effective rent plus letting/renewal fees; even self-managers should price their time. Add a maintenance reserve: apartments 2–3% of rent; villas 3–5% due to AC, pools and landscaping. Bake these into NOI, then test how +10% service charges or +1 month vacancy moves DSCR and cash-on-cash. If a deal only “works” under perfect assumptions, it doesn’t. Adjust price, switch buildings, or pass—discipline beats optimism.

Targets depend on strategy and leverage. Many income-focused buyers anchor on a DSCR ≥ 1.25 at Year-1 with conservative vacancy and OPEX—this gives breathing room for minor shocks. For cash-on-cash, mid-single-digits can be acceptable on prime, low-risk assets; opportunistic deals or heavier management may require higher. More important than the absolute number is resilience: does your DSCR stay above 1.20 after +1% interest and +1 month vacancy? Does cash-on-cash remain positive after a 10% OPEX bump? If the equity yield is marginal but you expect realistic operational upside (e.g., furnishing uplift, better management, energy efficiency), note the plan and timeline. For non-residents, underwrite stricter: LTVs are lower, and documentation or FX can slow moves. Bottom line: a “good” target is one your cash flow clears under stress, not just on the glossy base case.

Run a three-part filter. 1) OPEX discipline: compute service charges per rent dirham; amenity-rich towers look stunning but can crush NOI. Compare AED/sqft across shortlist, and ask for major-works history. 2) Rentability: verify 90-day rent comps, check lift speeds, parking flow, noise profile (tram, nightlife, construction), and view corridors; faster leasing compresses vacancy. 3) Governance & management: stable service levels and proactive maintenance preserve yields and resale liquidity. Avoid traps where gross yield is inflated by aspirational asking rents or where net yield collapses under fees and downtime. Always test a “lean” scenario (lower rent, higher OPEX) and a “tight” scenario (higher rent, stable OPEX). If the deal only pencils at the rosy end, negotiate the entry price or walk. A decent basis in a boring, well-run building often outperforms a glamorous pool deck that torpedoes cash flow.