Two sources of return
A property makes money in two ways. Rent arrives every year, and the value of the property may rise over time. Return on investment adds both together and compares them with everything you spent to buy. The calculator also takes off the cost of selling, so the profit shown is money you would actually have in hand.
How it is calculated
- Invested. Price plus purchase costs (4% DLD fee, registration and agent).
- Sale value. Price grown at your chosen rate for the years you hold it.
- Capital gain. Sale value minus selling commission, the price and purchase costs.
- Rental income. Net rent times years held.
- Annual return. The steady yearly rate that turns what you invested into your final amount.
Worked example
| Item | Amount |
|---|---|
| Invested (price + fees) | AED 1,596,220 |
| Sale value after 5 years at 4% | AED 1,824,979 |
| Rental income (5 x 80,000) | AED 400,000 |
| Total profit after selling costs | About AED 590,000 |
That is around 37% over five years, or roughly 6.5% a year. Change the growth rate to zero and you will see how much of the return depends on rent alone.
Frequently asked questions
How do I calculate ROI on a Dubai property?
Add your rental income and the gain in value after selling costs, then divide by everything you invested, including the price and purchase fees. Annualised ROI spreads that return evenly over the years you held it.
What price growth should I assume?
Dubai prices have moved sharply in both directions over the past two decades. For planning, test a range such as 0%, 3% and 6% a year rather than relying on recent peaks.
Is there capital gains tax in Dubai?
Individuals do not pay capital gains tax on property in the UAE. Selling costs such as agency commission still reduce your profit.
Does this include a mortgage?
No, it shows the return on a cash purchase. Borrowing increases both potential returns and risk, since you invest less cash but pay interest.