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What this guide does not do
Bonum Realty is a licensed real estate brokerage (RERA ORN 34799). We are not licensed investment advisers, we do not provide investment, tax or legal advice, and nothing here is a recommendation to buy any property.
Returns on Dubai property are not guaranteed. Rents fall as well as rise, buildings age, service charges are revised and new supply arrives in the same district; a resale can take considerably longer than a buyer expects. Any party presenting you with a guaranteed return or a projection of capital growth is making a commercial promise, not a statement of fact — read who stands behind it and what happens if they do not perform. Take independent advice from a regulated adviser in your own jurisdiction.
Ready or off-plan
The two routes behave differently as investments, and the choice is usually settled by whether income is needed now or later.
| Ready (secondary) | Off-plan | |
|---|---|---|
| Income | Begins as soon as the unit is let; the building, the service charge and the actual rent achieved can all be inspected before buying. | None until handover. The holding period before the first rent is paid is part of the cost of the investment. |
| Capital outlay | Full price at transfer, or a deposit plus mortgage. | Staged instalments under the payment plan, which spreads the outlay but commits the buyer to future payments. |
| Principal risks | Condition, ageing plant, service charge increases, and the quality of the existing tenancy. | Delay, specification variance at handover, and the volume of similar units delivered into the same district at the same time. |
| Protections | Title verified at the Land Department, physical inspection possible. | Escrow accounts and interim registration under the DLD's off-plan regime; see our off-plan versus ready guide. |
Neither route is inherently better. Off-plan concentrates the risk in the developer and the delivery date; ready concentrates it in the building and its management.
What drives rental demand
Rental demand in Dubai is driven almost entirely by employment and by household logistics, not by the features that sell a unit to an owner-occupier.
- Proximity to employment. Tenants price their commute. Districts within easy reach of the main business areas and the metro let faster and stay let.
- Schools, for family stock. A three-bedroom home near schools a family wants is a different asset from an identical unit that is not, and that difference shows in void periods.
- Building management. Lifts that work, clean common areas and a responsive association retain tenants. Poorly run buildings lose them to the newer tower next door.
- Competing supply. The question is not how many units exist today but how many comparable units are due for handover nearby in the next two years.
- Tenure rules. Whether the building permits short-term letting materially changes who your tenant can be, and the associated licensing and operating costs.
How a yield is calculated
Advertised yields are usually gross, calculated on the headline price and the asking rent. The figure that matters to an owner is the net yield, and it is calculated like this:
Net yield = (annual rent received − service charges − management and maintenance costs) ÷ total purchase cost
Each term must be taken honestly:
- Annual rent received is the rent actually collected over twelve months, not the asking rent, and it should be reduced for any expected void between tenancies.
- Service charges are the approved rate per square foot multiplied by the chargeable area, plus any reserve fund contribution, and they are revised periodically.
- Management and maintenance covers the letting agent's fee, the management fee if the unit is managed, routine repairs, and replacement of air-conditioning, appliances and furnishings over time.
- Total purchase cost is not the price. It is the price plus the DLD transfer fee of 4 per cent plus AED 580, the trustee fee of AED 4,000 plus VAT, agency commission, any mortgage registration of 0.25 per cent plus AED 290, and the cost of making the unit lettable. See Dubai property purchase costs.
We publish no yield figures here. Any number quoted to you should be traceable to a specific unit, a specific tenancy contract and a specific service charge statement.
Holding costs and exit
An investment case that models only the purchase is incomplete. The recurring costs of ownership are service charges, cooling capacity charges where the building is on district cooling, the municipality housing fee levied through the utility account, insurance, management and letting fees, periodic refurbishment, and mortgage interest where the purchase is financed.
The exit deserves equal attention at the outset. Liquidity varies sharply by segment: mainstream apartments in well-known districts have a deep and active buyer pool, while very large or unusually specified properties can take much longer to sell and depend on a small number of buyers being in the market at the time. A unit in a building where twenty similar units are also listed competes on price alone. Selling costs — agency commission, transfer fees where the parties agree the seller bears them, mortgage settlement and the developer's no-objection certificate — belong in the model from day one. See selling a luxury home in Dubai.
Residency, and the mistakes we see most
Property ownership can support a long-term residence visa: the ten-year Golden Visa route is available to owners of property with a value of at least AED 2 million, subject to the conditions set by the authorities at the time of application. Rules and documentary requirements change; our Golden Visa through property guide sets out the current position. Residency is a benefit of a sound purchase, not a reason to make an unsound one.
The recurring mistakes:
- Buying on a yield quoted by the seller without seeing the tenancy contract and the service charge statement.
- Ignoring the service charge until after transfer, when it is the largest controllable drag on net return.
- Treating a guaranteed-return scheme as risk-free without examining who guarantees it and for how long.
- Buying into a district by its launch marketing rather than by its handover pipeline.
- Modelling no voids, no refurbishment and no selling costs.
- Buying a property that suits the buyer's taste rather than the tenant's requirements.
For a second opinion on a specific unit rather than a general case for Dubai, we will look at the building, the charges, the comparable transactions and the competing supply and tell you what we find. Use the enquiry form or email info@bonumrealty.com. We are brokers, not advisers, and we do not guarantee outcomes.