Price per square foot, gross yield, net yield and cash flow answer different questions. State the formula and every input before comparing Dubai properties.
Four property metrics
| Metric | Formula | Use |
|---|---|---|
| Price per square foot | Purchase price ÷ consistent area | Compare similarly measured units |
| Gross yield | Annual rent ÷ purchase price | Fast screen before costs |
| Net yield | Net property income ÷ chosen cost basis | Compare property operations |
| Cash flow | Collected income − cash expenses − debt payments | Measure annual liquidity |
Worked calculation
Hypothetical unit: AED 1,000,000 price, 800 sq ft on a consistent saleable-area basis, AED 80,000 potential annual rent, AED 4,000 vacancy allowance, AED 12,000 service charges, AED 4,000 maintenance and AED 4,000 management.
- Price per sq ft = AED 1,000,000 ÷ 800 = AED 1,250.
- Gross yield = AED 80,000 ÷ AED 1,000,000 = 8.00%.
- Net property income = AED 80,000 − 4,000 − 12,000 − 4,000 − 4,000 = AED 56,000.
- Simplified net yield on price = AED 56,000 ÷ AED 1,000,000 = 5.60%.
The difference between 8.00% gross and 5.60% net is not a market claim. It is the mathematical result of the stated assumptions. Replace rent and cost inputs with evidence for the exact unit.
Choose the cost basis explicitly
If acquisition costs are assumed at AED 65,000 for teaching purposes, total cash cost before finance becomes AED 1,065,000. Net yield on that broader basis is AED 56,000 ÷ AED 1,065,000 = 5.26%. Obtain current written fee and finance figures; this assumption is not an official fee schedule.
Source and normalize comparable evidence
Retrieve current transactions through the DLD open-data service. Do not compare internal area on one unit with saleable or gross area on another. Separate asking prices from completed transactions. The DLD valuation service is available where a formal valuation is appropriate.
Failure case: strong gross yield, negative cash flow
Assume annual debt payments of AED 62,000 are added to the example. Cash flow becomes AED 56,000 − AED 62,000 = negative AED 6,000. The property can show an 8.00% gross yield and still require cash from the owner. Financing terms therefore belong in the liquidity model even when net property yield is calculated before finance.
Metric checklist
- Label the source and date of rent.
- Use one area definition.
- List vacancy and every recurring cost.
- State whether finance and acquisition costs are included.
- Show a downside case and keep all assumptions editable.
Related guides
Consult the DLD transaction service and Invest in Dubai guide for official public context.
