Return-on-investment calculator (Excel)

Take the annual rent, subtract annual costs — service charge, utilities, insurance, maintenance — divide by everything you invested and multiply by a hundred. Investment is not just the price of the unit: the 4% Land Department fee, any fit-out and furniture belong there too. Worked through: a $1,000,000 apartment let at $75,000 a year with $5,000 of costs nets $70,000 on roughly $1,050,000 invested, which is 6.7%.

Sale price less everything you put in, divided by what you put in, times a hundred. The same apartment bought at $1,000,000 and sold at $1,200,000: invested is $1,000,000 plus the 4% fee ($40,000), the service charge ($4,000) and $10,000 of works — $1,054,000 in total. Profit $146,000, return 13.9%. The gap between that and "it went up 20%" is precisely the costs nobody counts.

The benchmark is simple, because an investor is comparing property against the equity market: 8–10% a year is good. On Dubai apartments in unexciting districts, 6–9% gross is realistically available. Anything promising more than fifteen per cent without flipping or renovation deserves to be recalculated by hand — usually either void periods are missing from the model or a single peak-season rent has been annualised.

Strategy first: hold for capital preservation, let for a typical 5–10% a year, or flip, where the percentages are larger and so is the work. Then location — in the first quarter of 2024 the strongest apartment yields were not central but suburban and family-oriented: Dubai Silicon Oasis around 9.3%, JVC around 8.6%. Then size: a studio in the same building usually returns a point to a point and a half more than a three-bedroom. And then the payment plan.

Because the denominator shrinks. Buy at a million, sell at completion for 1.3 million: on a standard plan, $300,000 of profit over a million invested is 30%. On a plan where you had paid $600,000 by handover, the same $300,000 over $600,000 is 50%. The profit in cash is identical; only the return on capital employed has moved. That is not a trick, but it is not free either — the balance is still owed, and if the sale does not happen you fund it yourself.

On the crude measure of price divided by annual rent, Dubai comes out at roughly nine years — in the centre and outside it alike, which is telling in itself. On the same basis New York runs 16–18 years, London 21–27, Moscow around 26–28 and Singapore 27–32. The calculation is rough: it ignores service charges, void periods and rent growth. What it does show honestly is the order of magnitude between cities.

Four reasons stack up. Rental income is not taxed — in London the rate reaches 45%. The tenant pool is enormous: roughly three quarters of the city rents. Rent is normally paid a year in advance, so it arrives as one sum rather than twelve. And the dirham is pegged to the dollar, so there is no currency risk in the usual sense.

Void periods between tenants — and they happen, particularly when several phases in a district hand over at once. Letting and management fees. Repairs and appliance replacement a few years in. And service-charge inflation: the rate is not fixed forever, and in new buildings it is frequently revised upward after the first year or two.

Demographics. The UAE population was estimated at about 11.3 million in 2025, against 8 million in 2014, with expatriates making up roughly 88% of it. Dubai stood at about 3.94 million as of May 2025 and added more than 169,000 people during 2024 alone. National projections point to 12 million by 2030. As long as more people arrive than apartments complete, rents hold — and that, rather than any developer’s promise, is what the whole model rests on.