What rental yield tells you
Rental yield is the rent a property earns in a year, shown as a percentage of what it cost. It lets you compare properties with different prices on the same basis, and compare property with other uses of your money.
There are two versions, and it matters which one you are quoted. Gross yield uses the rent before any costs. Net yield takes off the costs of owning and letting the property. Net yield is always lower, and it is closer to the income you will actually receive.
Off-plan property earns no rent until it is handed over and let, so any yield you are quoted at launch is an estimate. It rests on assumptions about the rent, service charges and how quickly you find a tenant. This guide shows you how to test those assumptions using official Dubai Land Department (DLD) tools.
How to calculate gross rental yield
Gross rental yield = annual rent ÷ purchase price × 100. It is the quickest way to compare properties, but it leaves out every cost of ownership.
Illustrative example (made-up numbers, not market data): an apartment bought for AED 1,200,000 that lets for AED 84,000 a year has a gross yield of 84,000 ÷ 1,200,000 × 100 = 7.0%.
Gross yield is a fair way to compare similar properties in the same building or community. It can mislead when you compare properties with very different service charges, such as a tower apartment with a large shared amenity deck against a townhouse with lower shared costs.
How to calculate net rental yield
Net rental yield = (annual rent − annual running costs) ÷ total purchase cost × 100. Total purchase cost means the price plus one-off buying costs, such as the DLD registration fees explained in our DLD fees guide.
Typical running costs to include:
| Cost | Where to check it |
|---|---|
| Service charges | DLD Service Charge Index (RERA-approved budgets) |
| Maintenance and repairs | Your own allowance, based on the property's age and type |
| Property management, if used | Your management agreement |
| Empty months between tenants | Your own allowance (see the vacancy section below) |
| Insurance, utilities while empty, furnishing | Quotes and your own budget |
| Mortgage interest, if financed | Your lender's offer; deduct it to see your cash return |
Illustrative example, continued: suppose the purchase costs add AED 60,000, taking the total cost to AED 1,260,000. Annual costs are a AED 14,000 service charge, AED 4,000 for maintenance and insurance, AED 4,200 for management and AED 7,000 for one empty month. That leaves net income of 84,000 − 29,200 = AED 54,800, a net yield of 54,800 ÷ 1,260,000 × 100 = about 4.3%, against a gross yield of 7.0%.
Our rental yield calculator runs both formulas with your own figures.
Service charges and the DLD Service Charge Index
Service charges are usually the largest fixed cost for an apartment owner. In a let property, the landlord pays them, not the tenant. The DLD defines them as annual charges approved by RERA to cover managing, operating, maintaining and repairing a jointly owned property.
Management companies should not claim service charges until RERA has approved them, and owners pay into RERA-approved accounts after receiving an invoice through the Mollak system. To look up approved charges, use the DLD Service Charge Index on the DLD website or the Dubai REST app. Select the project name, the type of use and the year.
An off-plan building has no approved budget yet. Instead, look up completed buildings of a similar type and standard, ideally by the same developer or in the same community. Use those figures as your planning range, and check the developer's own estimate against them.
Vacancy, tenant turnover and rent caps
Every empty month costs you one-twelfth of the annual rent, about 8.3%. Two empty months in a year therefore cut that year's rental income by about 16.7%. Build at least some vacancy into your net yield, especially for the first letting after handover, when many owners in the same building may be looking for tenants at the same time.
Rent rises for sitting tenants are also capped. Under Decree No. 43 of 2013, the maximum increase when a lease is renewed depends on how far the current rent is below the average for similar units:
| Current rent compared with the average | Maximum increase on renewal |
|---|---|
| Up to 10% below | No increase |
| 11% to 20% below | 5% |
| 21% to 30% below | 10% |
| 31% to 40% below | 15% |
| More than 40% below | 20% |
The DLD says an owner may raise the rent in line with the rental index after giving the tenant three months' notice. In practice, this means your yield usually changes only slowly while a good tenant stays. You may only be able to bring the rent up to the market level when the property is re-let.
Using the DLD Rental Index and Ejari to estimate rent
The DLD Rental Index is the official starting point for rent assumptions. You enter the property type, area, number of rooms, current annual rent and contract expiry date. It then shows the average market rent for that area and any permitted increase. It is available on the DLD website, the Dubai REST app and the DubaiNow app.
The current Smart Residential Rent Index uses building classifications. It rates buildings on construction quality, architectural design, energy efficiency, services and location, and draws on databases that include registered rental contracts. It covers all residential areas of Dubai, including free zones, but excludes the Dubai International Financial Centre. The DLD updates it every year. For new leases the index is indicative only. It matters most when working out the permitted increase on a renewal.
Ejari is the DLD system for registering tenancy contracts. As of October 2026, the DLD lists a total fee of AED 177.75 to register or renew a contract through the website or Dubai REST, and AED 220 through a trustee centre. Because registered contracts feed the rent data, an index result for a well-established building rests on more evidence than one for a building that has only just been handed over.
Dubai yield figures: what published data shows
REIDIN's monthly UAE residential report shows Dubai's average gross yields easing during 2026. Rents fell faster than prices. These are averages for the whole city based on index data, not figures for any particular community or building.
| Dubai gross rental yield (REIDIN) | February 2026 | September 2026 |
|---|---|---|
| All residential | 6.58% | 6.17% |
| Apartments | 7.08% | 6.61% |
| Villas | 4.59% | 4.42% |
In the September 2026 report, Dubai's residential rent index was down 6.81% year on year and its sales price index was down 1.27%. When rents fall faster than prices, yields shrink. Use these figures to sense-check a quoted yield, not as a forecast. A quote well above the apartment average deserves a close look at the assumptions behind it.
What changes the yield in a particular community
Five things explain most of the gap between one building's yield and another's:
- The price you pay. Yield moves inversely with price, so the same rent on a cheaper unit gives a higher yield.
- Property type. On REIDIN's data, Dubai apartments yield more on average than villas.
- Building quality and classification. The Smart Rent Index rates individual buildings, so rents can differ between neighbouring towers.
- Service charges. High charges for extensive amenities reduce net yield unless the rent reflects them.
- New supply. Several buildings handing over close together can lengthen letting periods. Check which projects are due nearby, for example those handing over in 2027.
For a comparison of communities, see where to buy off-plan in Dubai in 2027.
Estimating yield on an off-plan purchase
For an off-plan unit, base your estimate on completed buildings nearby, never on a brochure figure. Follow these steps:
- Find two or three completed buildings of a similar standard in the same community.
- Check their market rents on the DLD Rental Index, and price trends using the sale index in the Dubai REST app.
- Look up their approved service charges on the Service Charge Index.
- Allow for at least one empty month in the first year after handover.
- Remember that payments still due after handover reduce your cash flow. See post-handover payment plans and off-plan mortgages.
Run the numbers in the rental yield calculator, then test a lower rent and a longer empty period to see how much room for error you have.
