Direct answer
What is the rental-yield formula?
Gross rental yield = annual achievable rent ÷ property purchase price × 100. Simplified net yield = (annual rent − recurring property costs − vacancy allowance) ÷ purchase price × 100. Use one currency throughout: converting both rent and price from AED to USD does not change the percentage.
Official sources: Real Estate Data · Domestic Market Operations: AED/USD intervention ratesWritten by Arjun Mehta, Property Investment Analyst, Property Stellar. Reviewed by Omar Al Mansouri, Dubai Real Estate Investment Consultant · UAE Real Estate Market Specialist. Updated 15 September 2026. Read our editorial policy and research methodology.
Reviewed by Omar Al Mansouri · Official sources checked 15 September 2026
Yield is a comparison tool, not a return guarantee. Use completed sale and rental-contract evidence for comparable properties, then show each excluded cost instead of mixing gross yield, net yield and cash-on-cash return.
The denominator can be purchase price for comparability or total acquisition cost for a more complete personal model. Label the choice so two results are not compared as though they use the same formula.
Worked AED and USD example
| Input / result | AED | Approx. USD | Calculation |
|---|---|---|---|
| Purchase price | AED 1,500,000 | $408,441 | Input |
| Annual achievable rent | AED 105,000 | $28,591 | Input |
| Recurring costs + vacancy allowance | AED 30,000 | $8,169 | Input |
| Gross yield | 7.00% | 7.00% | 105,000 / 1,500,000 × 100 |
| Simplified net income | AED 75,000 | $20,422 | 105,000 − 30,000 |
| Simplified net yield | 5.00% | 5.00% | 75,000 / 1,500,000 × 100 |
The Central Bank publishes intervention rates of 3.672 and 3.673 AED per US dollar. A bank or card provider's customer rate and fees may differ, so USD values here are illustrations rather than settlement quotes.
Official source: Domestic Market Operations: AED/USD intervention ratesBuild the recurring-cost line before calling yield ‘net’
| Cost | Treatment | Evidence |
|---|---|---|
| Service charge | Deduct current annual amount | Exact project and budget year in DLD Service Charge Index |
| Vacancy | Use a disclosed annual allowance | Comparable turnover and conservative scenario |
| Maintenance / insurance | Deduct realistic annual allowance or quotes | Unit condition, contracts and invoices |
| Management / leasing | Deduct if the service will be used | Written fee schedule |
| Finance | Show separately from property net yield | Lender offer, rate and amortisation |
| Acquisition / sale costs | Model in total return or amortised scenario | Current official and provider fees |
Use comparable transactions, not mixed averages
- Match building or a tightly defined area, ready/off-plan status, property type, bedrooms, size and time period.
- Use new rental contracts for an acquisition rent assumption; renewal contracts answer a different question.
- Show sample sizes and medians; do not present an area mean as the expected result for one unit.
- Separate asking prices and asking rents from completed DLD records.
- Recalculate with a lower rent, vacancy period and higher costs before making a decision.
Frequently asked questions
Does converting Dubai rent and price into USD change yield?
No, provided the same exchange rate is applied to both. The numerator and denominator scale together, so the percentage is unchanged.
Should DLD registration fees be deducted from annual rent?
No. Registration and acquisition fees are one-time costs, not recurring operating expenses. Include them in total acquisition cost or a clearly labelled holding-period return model.
Is net yield the same as cash-on-cash return?
No. Net property yield measures income against a property-cost denominator before investor-specific financing. Cash-on-cash return uses the investor's cash invested after finance cash flows; label assumptions clearly.
Primary-source register
Official pages used for this review
Continue with the right guide
Important: The worked example is illustrative. Yield is not guaranteed and excludes investor-specific finance, tax and disposal outcomes unless explicitly modelled.
Calculate the exact deal
Move from advertised yield to a complete cost model
Enter the property's price, achievable rent and recurring costs, then stress-test the result.