Gross yield is annual rent divided by purchase price. Net yield subtracts all annual costs — service charges, management fees, insurance, and void periods — before dividing by purchase price. In the UAE, net yield is typically 1.5–2.5 percentage points below gross yield. A property quoted at 7% gross may deliver 4.5–5.5% net.
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.
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District Intelligence content is indicative only and does not constitute investment advice. Consult a licensed District Real Estate advisor before making any property decision.