Model Dubai investment property from collected rent to final cash flow. A high asking rent does not establish net income, and a payment plan does not establish profitability.
Annual cash-flow formula
Cash flow before tax = collected rent − vacancy and collection loss − service charges − maintenance − management − insurance or other property costs − annual debt payments. Keep one row for every assumption and attach its source.
Worked base and downside cases
| Input | Base | Downside |
|---|---|---|
| Potential rent | AED 100,000 | AED 92,000 |
| Vacancy/collection | AED 5,000 | AED 12,000 |
| Service charges | AED 15,000 | AED 17,000 |
| Maintenance/management | AED 10,000 | AED 14,000 |
| Debt payments | AED 48,000 | AED 48,000 |
| Cash flow | AED 22,000 | AED 1,000 |
Base cash flow is AED 100,000 − 5,000 − 15,000 − 10,000 − 48,000 = AED 22,000. The downside leaves AED 1,000. Both are hypothetical teaching cases. Neither is a Dubai average or a promised result.
Source each input
- Price: completed comparable transactions from the DLD open-data service, not only asking listings.
- Rent: current comparable leases or an existing contract, adjusted for vacancy.
- Charges: current building budget or written management statement.
- Finance: lender offer, fees and payment schedule.
- Value: the DLD valuation service where formal valuation is required.
Cash-on-cash calculation
If the buyer has AED 500,000 of equity and initial costs in the example, base cash-on-cash return is AED 22,000 ÷ AED 500,000 = 4.40%. The downside is 0.20%. Change the debt or reserve and the result changes. State whether the denominator includes transaction costs and initial works.
Failure case: funding a future instalment with hoped-for rent
An off-plan unit cannot produce rent before completion and legal occupancy. If a later payment depends on rent that cannot yet exist, the schedule is not funded. Review project and escrow controls in the DLD escrow guidance and use a cash reserve independent of an assumed resale.
Decision rules
- Reject any model with an unlabeled rent or cost input.
- Show the result before and after finance.
- Test lower rent, vacancy and higher costs together.
- Keep emergency reserves outside the acquisition budget.
- Do not add appreciation to make negative cash flow appear acceptable.
Related guides
Use the DLD transaction service for the official transaction pathway.
