How the ROI is worked out
- Cash in = down payment + purchase fees (4% DLD, trustee, 2% agency + VAT, and mortgage fees if you borrow)
- Yearly cash flow = rent after vacant weeks − running costs − mortgage payments
- Sale = future price − selling agent fee + VAT − mortgage still owed
- Total ROI = (all cash flows + sale − cash in) ÷ cash in
- IRR = the yearly rate at which those flows break even, taking timing into account
Example
A AED 2,000,000 two-bedroom apartment is bought with 20% down and a 4.25% mortgage over 25 years. It rents for AED 130,000 a year with AED 25,000 of service charges and other costs and four empty weeks a year. Rent and costs rise 3% a year and the price grows 4% a year. After five years it is sold with a 2% agent fee. With the default figures above, the cash in is about AED 551,000 (down payment plus fees). The rent roughly covers the costs and mortgage, so almost all of the return comes from price growth: a total ROI of about 75%, or 11.7% a year (IRR) – and price growth is never guaranteed. Set price growth to 0 to see how much of the return the rent alone covers.
Things that change the result most
- Price growth – a few percent a year makes a large difference on a mortgaged property. Test 0% and a fall.
- Service charges – they vary widely by building and come straight off your income every year.
- Holding period – purchase fees of around 7–8% need a few years of rent and growth to recover.
- Vacancy – each empty month costs about 8% of the year’s rent.
Golden Visa
A property worth AED 2 million or more can qualify you and your family for the 10-year UAE Golden Visa, including with a mortgage. See our UAE Golden Visa guide for the routes, documents and costs.
Check a single year with the rental yield calculator, itemise the purchase costs with the Dubai property fees calculator and plan payments with the mortgage calculator.
Related guides
- UAE Golden Visa 2026: Who Qualifies, Costs and How to Apply
- The True Cost of Buying Property in Dubai (With Real Numbers)
Frequently asked questions
What is a good ROI on Dubai property?
Investors usually look for a net rental yield of 4–6% plus some price growth. Over a five-year hold, a total annual return (IRR) of 7–10% on the cash invested is generally considered good for a mortgaged apartment, but it depends heavily on the purchase price, service charges and the market when you sell.
What is the difference between ROI and rental yield?
Rental yield only looks at one year of rent against the price. ROI covers the whole holding period: every year’s cash flow after costs and mortgage, plus what you get when you sell, minus the cash you put in at the start.
What is IRR and why does it matter?
The internal rate of return is the yearly return that makes all your cash flows – the money in at the start, the rent each year and the sale at the end – break even. It lets you compare a property with a deposit or a fund on equal terms, because it accounts for when the money arrives.
Does a mortgage increase my return?
Borrowing means you put in less cash, so if the property’s return is higher than the mortgage rate, your return on cash rises. It also works the other way: if prices fall or the unit stays empty, losses on your own money are bigger.
Do I pay tax on property profit in the UAE?
Individuals pay no income tax or capital gains tax on UAE property. Property held through a company can fall under the 9% UAE corporate tax, and your home country may tax worldwide income.
Last reviewed: October 2026