Gross yield
Gross yield is a property's annual rent divided by its price, shown as a percentage, before any costs, taxes or empty periods are deducted.
What Gross yield means for a buyer
Gross yield is the simplest measure of rental return:
annual rent ÷ purchase price × 100
A flat bought for AED 1,500,000 and let for AED 90,000 a year has a gross yield of 6.0%.
It is the figure quoted in almost all marketing and most market reports, because it needs only two numbers. Its usefulness is for comparison: between districts, between unit types in the same building, or over time. Smaller units generally show higher gross yields than larger ones, and mid-market areas higher than prime ones.
Its weakness is everything it leaves out. Gross yield ignores service charges, management and letting fees, maintenance, insurance, vacancy, furnishing, mortgage interest and the costs of buying. The gap between gross and net yield is material: in the worked example on that page, 6.0% gross becomes about 4.1% net, and the gap is wider in buildings with high service charges.
Questions to ask of any quoted yield:
- Is it gross or net?
- Is the rent achieved, taken from registered tenancies, or an asking rent or projection?
- Is the price the one you would pay today, including the 4% transfer fee?
- What date and source does it come from?
For off-plan property a yield is a forecast twice over: of the rent at handover, and of the supply competing with you then. Treat it as an estimate. See the guide to Dubai rental yields.
Related terms
Guides that use this term
Where Gross yield comes up in practice, with the costs, rules and steps around it.
Questions about the buying process?
An adviser can explain how this applies to the property you're considering.
- Current price list and availability, direct from the developer
- No fee to you on off-plan purchases: the developer pays us
- One salaried adviser, not on commission, from first call to handover
