How to Calculate Property Rental Yield – Free Rental Yield Calculator Dubai
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 (see post here) in Dubai and the potential return on investment (ROI) of a given property for a long-term lease.
In short, assuming all other factors are equal, a property with a greater cash flow is the better investment.
How to Use the Rental Property Yield ROI Calculator (Long-Term Lease)
Once downloaded, the template is yours to use and customize. The green cells require input, and some may need customization (i.e. conveyance fees ranges between AED 5k – AED 10K). Orange cells have embedded calculations, so should not need much editing. If you accidentally remove the formulas inside the cell, just download the template again to start over.
A few things to highlight…
1. Property Price
Research property value on Bayut and Property Finder and also see what rental properties listed for the same building are going for. Plug the values into Cell B9 (Property Price) and B32 (Gross Annual Rental Revenue).
If you plan to get a mortgage, we particularly like this Dubai Mortgage Calculator as it calculates all the up-front costs, shows you the recurring monthly cost, and customizes your service charge based on the size of the property. Once you have the numbers from Dubai Mortgage Calculator, plug them into Cell B27, B28, and B29 (Mortgage Portion) of the template.
3. Cash Buy
If you plan to purchase with cash, simply put ‘0’ for Cell B27, B28, and B29 (Mortgage Portion) to view projected cash flow and cash-on-cash return with no mortgage.
Enter your potential expenses to generate profits and cash flow estimates.
Analyzing the Results
Will the actual cash-on-cash returns look exactly like the way we calculated them? Probably not. The spreadsheet is to help get your mind working on property analysis, understand your price limits, and be clear on all the expenses that may come up. The cash flow results are meant to give you an idea of how good an investment this property may be from a cash flow perspective. Most importantly, it will help compare similar properties to each other, so you can make better investment decisions.
Disclaimer: Home It Better is not your financial advisor or real estate agent. The articles here are for informational purposes only, and should not be used as a substitute for advice from a licensed professional.