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Estimating Rent and Maximizing Your Rental Yield in Dubai

Estimating Rent and Rental Yield Dubai

It’s no secret that people continues to invest in properties in Dubai, and rental properties offers lucrative rewards to those who do it right. Estimating rent optimally for your rental property can be tricky. You don’t want to charge too much that makes it difficult to attract and keep good tenants, but you want to charge enough to maximize revenue.

And, by the way, the rent hikes are coming.

As of March 1st 2024, the Dubai RERA Rental Index update enables landlords to set rents in line with current community-specific market rates, removing the existing 10% cap on increases.  

So, how do you decide on the right rent for your rental property? Here are a few resources you can use when analyzing your rental properties so that you charge enough to reflect the property’s value.

1. Estimating Rent Using Transaction History: How to Boost Your Dubai Rental Yield

First, understanding the rental market and how much rent is charged for similar properties is essential before coming up with an amount.

Here are some property websites offering rental transaction history and property market analysis:

  1. Property Guru – Transactions in Dubai
  2. Bayut – Rental History
  3. dxb.com – Transaction History

Of course, getting the numbers right before you put your property on the market is important, but you will also need to consider what makes your property unique to justify a higher rent.

When assessing your unit, take the time to look at the details of the comparable rental properties. Here are some guidelines: 

  • Compare the rental amount for at least 3-5 other rental units as closely match (i.e. same number of bedrooms, bathrooms, layout, square footage, etc) to your rental property as possible, preferably in the same building or community.
  • Find comparisons for rental properties that best match the category and style of your property (i.e. waterfront apartment, beachfront villa, off-plan, etc)
  • When was the property built? Find comparisons rentals that are approximately the same age as your property.
  • Compare rental properties that have the same visual appeal and amenities as yours (i.e. similar waterfront view, modern renovation, open kitchen, built-in gym, swimming pool, etc)

2. Estimating Rent With Your Agent: Enhancing Dubai Rental Yield

If you’ve an agent skilled in investment properties, you are in luck. They know the rents. They have a pretty good understanding of this area versus that area. Many agents invest in properties themselves and know the market well enough to help you pull comparable properties to figure out potential rent yield. They have done what you are trying to do.

3. Estimating Rent with Property Management Companies

For short-term rental, income is seasonal. In Dubai, short-term rental peaks from October to March, but you’ll also need to consider the ‘dead’ months in the hot summer when bookings can be a struggle.

Companies like Airdna.co and local property management companies have tools that can help make better forecast. A great property manager, much like a good agent, should know which areas are in high demand for long-term rental and which ones are better performer for short-term rentals. Rental data can often be shared to evaluate the rental yield potential in Dubai. 

Ask the property management companies for the data.

4. Estimating Rent with our Dubai Rental Yield Calculator

Once you have some numbers in mind, here are our most-viewed calculators you can use to customize and analyze your ROI to reap in the profits:

1. If you’re interested in long-term rental, use our Long Term Rental Yield Calculator – Free Template

2. If you’re interested in short-term rental, use our Short-Term Rental Yield Calculator – Free Template

Next: Part 1: Properties with Best ROI Potential in Dubai – How to Find Them

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