The formula is simple. Getting the inputs right is hard.
Rental yield is the annual rental income expressed as a percentage of the property's value. The formula:
Gross Yield = (Annual Rent ÷ Purchase Price) × 100
Example: a property bought for AED 1,000,000 that rents for AED 70,000/year has a gross yield of 7.0%.
Simple, right? Except most investors get both inputs wrong.
Mistake #1: Using listing rent instead of contract rent
This is the biggest mistake — and it inflates your projected yield by 12-18%.
Property portals show listing rents — what landlords advertise. But tenants negotiate. The actual signed rent (recorded in Dubai's Ejari system) is always lower.
| Community | Avg listing rent | Avg Ejari rent | Overstatement |
|---|---|---|---|
| Dubai Marina | AED 95,000 | AED 82,000 | +16% |
| Downtown | AED 130,000 | AED 108,000 | +20% |
| JVC | AED 55,000 | AED 48,000 | +15% |
Fix: Use Ejari contract rents. Sqftly's [Yield Calculator](/yield) does this automatically.
Mistake #2: Ignoring costs (using gross instead of net)
Gross yield ignores the costs that eat into your returns:
Net Yield = (Annual Rent − All Costs) ÷ Purchase Price × 100
A property with 7% gross yield might deliver only 4.5% net yield after all costs.
Fix: Use Sqftly's [ROI Calculator](/calculator) — it includes service charges, maintenance, and vacancy in the calculation.
Mistake #3: Using the wrong purchase price
Some investors calculate yield based on the current market value, not their actual purchase price. This creates misleading numbers.
If you bought for AED 800,000 and the property is now worth AED 1,000,000, your yield on cost is different from your yield on market value:
Both are valid, but they answer different questions. Yield on cost tells you how your investment is performing. Yield on market tells you if you should sell and redeploy.
The right way to calculate Dubai rental yield
1. Get the Ejari contract rent (not listing rent)
2. Subtract service charges, maintenance, vacancy, and fees
3. Divide by your actual purchase price (not current market value)
4. That's your real net yield
Or just use [Sqftly](/yield). We've done the math for every community in Dubai.
Data source: Dubai Land Department + Ejari via Dubai Pulse. DDE Open Data Licence.