Gross yield, net yield, cash-on-cash — what each one means
Investors throw the word "yield" around as if it were one figure. It isn't. There are three, and the gap between them is where most of the disappointment lives. This tool shows all three so you compare like with like.
- Gross yield = annual rent ÷ property price. The headline number, and the one agents quote. It ignores every cost of ownership, so treat it as a starting point, not a return.
- Net yield = (annual rent − annual running costs) ÷ property price. This is the honest figure: what the asset earns after the costs of holding it, before any mortgage. The denominator is still the price you paid.
- Cash-on-cash return = annual cash flow after mortgage ÷ cash actually invested. If you borrow, this is the one that tells you how hard your own money is working — because you didn't fund the whole property, only the deposit and the upfront costs.
The calculator also reports net operating income (rent minus running costs, before finance) and, for a financed purchase, your annual and monthly cash flow after the mortgage is paid.
The costs that quietly eat your yield
A gross figure of, say, 7% can land closer to 5% net once the real costs of UAE ownership come off the top. The big ones to enter:
- Service charges. In Dubai these are billed per square foot through the RERA Mollak system, which ring-fences the money in an escrow account for the building's upkeep. The rate per sq ft varies enormously by building — a basic tower is not a serviced high-rise — so pull the actual figure for your unit rather than guessing. Our guide to service charges explains how they are set.
- Management fees. If you use a property manager, budget a percentage of the annual rent. The rate is a commercial arrangement, not a fixed rule, so confirm it with the agent.
- Maintenance and insurance. Smaller line items, but real, and easy to forget on a cash-flow forecast.
- Void periods. The weeks between tenants when rent stops but the service charge doesn't. A single empty month can knock a percentage point off a tight net yield, so be conservative.
Add these up and put the total into the annual-costs field. The calculator subtracts them to give you the net figure, rather than the flattering gross one.
What counts as "cash invested"
Cash-on-cash only means something if the denominator is right. The cash you actually sink into a financed deal is your deposit plus the upfront purchase costs — and in the UAE those costs run to roughly 7% of the price (the 4% DLD transfer fee, registration, agency commission and, on a mortgage, the bank and valuation fees). The tool defaults to about 7% but lets you override it. For the exact breakdown on your purchase, run the figures through the purchase-cost calculator.
Why leverage can lift your return — and when it doesn't
Borrowing changes the maths in your favour only under one condition: the property's net yield has to beat the cost of the mortgage. When it does, you are earning the asset's return on the bank's money as well as your own, so the return on your slice of cash — the cash-on-cash figure — rises above the unleveraged net yield. That is positive leverage.
Flip the condition and leverage works against you. If the mortgage rate is higher than the net yield, every borrowed dirham drags the return down, and a property that looked fine on a gross basis can run at negative monthly cash flow. The calculator makes this visible: enter the deposit, rate and term and watch what happens to the monthly cash flow and the cash-on-cash number. If the cash flow goes red, the deal is costing you money to hold, whatever the gross yield said.
What a "good" Dubai yield looks like
You'll often see Dubai gross yields cited in the region of 5% to 8%. Treat that as a market observation, not a benchmark you're entitled to — it varies sharply by area, building age, unit size and whether the rent is annual or short-let. Smaller units in mid-market communities tend to show higher gross yields than prime apartments; the net picture, after service charges, can look quite different. Use the actual rent and the actual service charge for the specific unit, and judge the deal on its net and cash-on-cash numbers, not the headline.
Use it alongside the other tools
Yield answers "is this a good investment?". If your question is instead "should I buy at all, or keep renting?", the rent vs buy calculator frames it from the owner-occupier side. To understand the mechanics behind these formulas in more depth, read rental yield explained. And you can find everything in one place on the all calculators hub.
This calculator is for estimation only and is not financial advice. Rents, service charges and mortgage rates change — confirm the current figures for your specific property before you commit.