Gross yield and net yield: why they are not the same

When people tell you what a property earns, listen for one word: gross or net. They sound similar, and the gap between them can be large. Knowing the difference is one of the simplest ways to see a property clearly.

Gross yield

Gross yield is the yearly rent divided by the price, shown as a percentage. If a property costs 100 and rents for 7 a year, the gross yield is 7 percent. It is quick to calculate, which is why it appears in adverts.

Net yield

Net yield is what is left after the costs of owning. Take the yearly rent, subtract what you pay to own and rent the property, and divide by the price.

The costs to remember include:

• The service charge.
• Maintenance and repairs.
• Periods when the home is empty between tenants.
• Agent and management fees.
• Any cost of financing, if you use a mortgage.

A simple example

Using the same units: price 100, yearly rent 7.

• Service charge: 1
• Maintenance: 0.5
• A month empty: about 0.6
• Management fee: 0.5

The costs add up to 2.6. The net rent is 4.4, so the net yield is 4.4 percent, against a gross yield of 7 percent. The numbers here are made up to show the method. They are not figures for any property or any market.

How to use this

• Compare homes on net yield, not gross.
• Ask for the expected service charge in writing. The Dubai Land Department's Service Charge Index shows the fees approved for completed jointly owned properties, which gives you a comparison.
• Be careful with rent estimates. Compare with what similar homes in a completed building nearby are actually renting for.
• Remember that yield is one part of the story. Price changes and your own time horizon matter too.

For family offices and larger investors

For a portfolio of units, build a simple model: rent, each cost line, vacancy and the date each unit completes, with a base case and a cautious case. Review it each year against actual figures. A cautious case that still works for you is more valuable than an optimistic one that looks impressive. I would also look at net yield per building, since service charges and demand differ from one building to the next.

My view

Gross yield is where the conversation starts. Net yield is where the decision is made. A property that looks good on both is a pleasure to hold. And if it only looks good on gross yield, we have learned something useful before it cost us anything.

If you would like to talk it through before you decide, you are welcome to contact me.

Sources: Dubai Land Department, Service Charge Index (dubailand.gov.ae). Figures in the example are illustrations, not promises. Checked on 24 October 2026. Rules and fees change, so confirm for your own purchase.