Free ROI Calculator: Calculate Rental Yield for Long Term Rental
Introducing the ultimate ROI Calculator, your one-stop-shop for crunching the numbers and maximizing your returns in Dubai.
Built in Excel on Google Sheets, this real estate return on investment calculator includes all the upfront and extra costs that come with buying a property for a long-term lease in Dubai.
By simply inputting a few key details about your property, such as the purchase price, expected rental, and associated costs, the calculator will do the heavy lifting and give you your potential ROI of a given property.
In short, assuming all other factors are equal, a property with a greater cash flow is the better investment.
ROI Calculator for Long Term Lease
How to Use our ROI Calculator for 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 it should not require editing.
If you accidentally remove the formulas inside the cell, just download the template again to start over.
Here’s a guide to help you make the most of this powerful tool:
1. Property Price
You can search property prices on Bayut and Property Finder and also see what the rental prices listed for the same building are going for.
Then, plug in those prices into Cell B9 (Property Price) and B32 (Gross Annual Rental Revenue).
2. 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.
3. Mortgage
If you plan to get a mortgage, you will need to find out an estimate of your mortgage monthly payments.
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 (see photo below), plug the numbers into Cell B27, B28, and B29 (Mortgage Portion) of the template.
4. Expenses
Enter your potential expenses you can think of to generate profits and cash flow estimates.
5. Fine-Tune Assumptions
Play around with the assumptions. You can tweak numbers like rental income, expenses, and monthly mortgage payment to see how they affect the overall picture.
Analyzing Your Results
Review the key metrics such as cash flow, ROI, and yield to decide if the investment aligns with your financial goals and risk tolerance.
Will the actual cashflow and yield look exactly like the way we calculated them?
Probably not.
The ROI Calculator 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, this real estate return on investment calculator will help compare similar properties to each other, so you can make better investment decisions.
Next: Find Out How Much Home You Can Afford
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.
