Properties with Best Rental Yield in Dubai – How To Find Them (Part 2)
In Part 1, we went through 6 factors that will impact your rental yield. Now in Part 2, we will show you step-by-step on how to search for properties only with the highest rental yield in Dubai.
Let’s be honest, you probably will not find that perfect rental property that checks all on your list, but at least now you will have the tools to do your own due diligence.
Steps to Find Highest Rental Yield in Dubai
Step 1: Make a Community Evaluation
As mentioned in Part 1 post, here are the top 10 best areas to buy properties in Dubai (as of Sep 2023).
|Rank||Community||Sold Properties||Average Price|
|1.||Jumeirah Village Circle||8,796||AED 746.7K|
|2.||Dubai Marina||7,019||AED 3M|
|3.||Business Bay||6,546||AED 1.4M|
|4.||Dubai Creek Harbour||3,925||AED 2.2M|
|5.||Jumeirah Lakes Towers||3,651||AED 1.1M|
|6.||Dubai Hills||3,178||AED 1.9M|
|8.||Sobha Hartland||2,730||AED 1.7M|
|9.||Town Square||2,211||AED 950.9K|
|10.||Palm Jumeriah||1,843||AED 3.9M|
To get an idea of the rental yield in the top 10 communities, we have extracted the average rental gross yield for a “1 Bedroom Apartment” from Property Finder. Keep in mind this is a ‘gross yield’ which means, community service charges and all other associated costs have not been factored in.
Average Gross Yield in Top 10 Best Communities to Buy Properties in Dubai
Last 3 months (as of Sep 2023)
|Rank||Community||Average Sale Price||Average Rental||Average Rental Gross|
|1.||Jumeirah Village Circle||AED 721,384||AED 68,000||7.90%|
|2.||Dubai Marina||AED 1,147,500||AED 105,000||6.30%|
|3.||Business Bay||AED 1,121,500||AED 95,000||5.80%|
|4.||Dubai Creek Harbour||AED 1,400,000||AED 100,000||6.30%|
|5.||Jumeirah Lakes Towers||AED 855,000||AED 80,000||5.70%|
|6.||Dubai Hills||AED 1,427,500||AED 115,000||7.40%|
|7.||Arjan||AED 534,750||AED 64,999||6.30%|
|8.||Sobha Hartland||AED 975,000||AED 75,000||5.30%|
|9.||Town Square||AED 565,000||AED 55,000||7.80%|
|10.||Palm Jumeriah||AED 2,155,000||AED 180,000||5.10%|
*Property Finder: Rental gross yield = Average annual rental price / Average sale ‘asking’ price.
Step 2: Search & Compare Similar Rental Properties
As an investor, plan on investing in an area you are familiar with or near you. It will help you become an expert in your chosen area, and compare deals nearby, easier.
Once you have narrowed down an area (or two) you are comfortable with, start looking for properties on property websites that fit your list of criteria. But first, you need to be very clear on your criteria. This will prevent you from deviating and help maximize your potential rental yield.
Stick to your criteria on how much ‘home’ you can afford.
Here are some criteria that should be clearly defined:
1. Maximum purchase price
2. Maximum mortgage payment
3. Cash-flow requirement
4. Cash on cash return
5. Maximum furnishing cost
Once you have narrowed down some potential properties in an area, you can review and compare the property building details (i.e. sale price, rental yield, rental history) at DXB Interact.
Step 3: Use Dubai Rental Yield Calculator for ROI
Clearly, a strong return on investment (ROI) is the ultimate goal when investing in any property.
We have put together a simple Rental Yield Calculator called “Rental Yield Calculator Dubai” using Excel/Google Sheets. This calculator includes all the upfront and extra costs that come with buying a property in Dubai and the potential return on investment (ROI) of a given property.
- Rental Yield Calculator Dubai for long-term lease – Free
- Rental Yield Calculator for Airbnb / short-term lease – Free
In short, assuming all other factors are equal, a property with a greater cash flow is the better investment.
When considering areas with the best rental yield, it’s not just about dividing rental income by property purchase price. There is a lot more to it than only factoring in those two numbers, so make sure you take the time to research, dig in the facts, understand what you are getting into, and then build your plan around it.