What the yield really is
Gross yield is annual rent divided by purchase price. It is the number quoted in every advert and it is not the number you keep.
Net yield takes out service charges, management, maintenance, and the weeks the property sits empty between tenancies. In Dubai the gap between gross and net is usually 1.5 to 2.5 percentage points, and service charges are the biggest reason.
A tower quoting 8 percent gross with a high service charge can easily net less than a villa quoting 6. Always ask for the service charge per square foot before you judge a yield.
What you can charge, and what you cannot
Rent increases are governed by the RERA rental index. The permitted increase depends on how far below market your current rent sits.
If your rent is within 10 percent of the market average, no increase is allowed at all. The steps rise from there, to a maximum of 20 percent where rent is more than 40 percent below market.
| How far below market average | Maximum increase |
|---|---|
| Up to 10% below | No increase permitted |
| 11% to 20% below | 5% |
| 21% to 30% below | 10% |
| 31% to 40% below | 15% |
| More than 40% below | 20% |
Notice periods that catch people out
To increase the rent or change any term, you must give 90 days written notice before the renewal date. Miss it and the contract renews on the existing terms.
To recover the property for your own use, for a family member, or to sell, you must give 12 months notice by notary or registered post. This applies at the end of the tenancy, not during it.
Neither of these can be shortened by a clause in the contract. Tenancy law overrides what the tenancy says.
Reducing your void periods
An empty month costs more than most landlords save by holding out for a higher rent. On a property let at AED 120,000, one vacant month is AED 10,000. Holding out for another AED 5,000 a year takes two years to recover.
Start marketing 60 to 90 days before the current tenancy ends. Renew good tenants early and at a fair number. A tenant who stays three years is worth more than one who pays 4 percent more and leaves.
What we handle
Tenant sourcing and referencing, Ejari registration, cheque handling, and the annual renewal conversation. Then maintenance coordination, service charge oversight and reporting through the year.
If you are overseas, that last part is the point. A property you cannot visit needs someone who can.