Gross Yield vs Net Yield on UAE Property — What You Need to Know

## Why the Difference Matters UAE property portals and developers almost always quote gross yield. A developer claiming "9% returns" means gross — before costs. Understanding the deductions determines whether the investment actually makes sense. ## Gross Yield Calculation **Gross Yield = (Annual Rent ÷ Purchase Price) × 100** Example: AED 750,000 property, AED 60,000 annual rent = 8% gross yield. ## Net Yield Calculation **Net Yield = ((Annual Rent − Annual Costs) ÷ Purchase Price) × 100** Annual costs include: - **Service charge:** AED 10–30 per sqft per year depending on building - **Property management fee:** 5–10% of annual rent - **Insurance:** AED 1,000–3,000 per year - **Void allowance:** Typically 1–2 months per year (8–17% of annual rent) - **Maintenance/minor repairs:** AED 2,000–8,000 per year ## Real-World Net Yield Example | Item | Amount | |---|---| | Purchase price | AED 750,000 | | Gross rent (annual) | AED 60,000 | | Service charge (15 psf × 700 sqft) | AED 10,500 | | Management fee (8%) | AED 4,800 | | Insurance | AED 1,500 | | Void (6 weeks) | AED 6,900 | | Maintenance | AED 3,000 | | **Total costs** | **AED 26,700** | | **Net income** | **AED 33,300** | | **Net yield** | **4.4%** | Gross yield: 8%. Net yield: 4.4%. A 3.6 percentage point gap on this example. ## Dubai vs Abu Dhabi Service Charges Abu Dhabi service charges are generally lower than Dubai for equivalent quality buildings. On a 1,000 sqft apartment: AED 12,000/yr in Abu Dhabi vs AED 18,000/yr in Dubai for a comparable mid-market building. Over a 10-year hold this is AED 60,000 difference — material on a AED 1M investment. ## DRE Advisory Note Always request the actual service charge figure (AED per sqft per year) for any specific building before purchase. Budget at least 15% of gross rent for costs in a self-managed property and 20–25% if using a property manager. District provides net yield estimates for all properties we advise on.