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Revealed: Where to buy a house with best returns in UAE

UAE's smallest emirate, Ajman, offers one of the world's biggest rental yields

Image Credit: Courtesy: Ajman Rera
Ajman real estate is said to offer one of the world's highest rental yields.

Dubai: Residents or investors planning to own a property in the UAE would do well to invest their money in Ajman, if they’re looking for great returns every year.

According to research across various communities in the country, the emirate offers one of the highest rental yields in the world, pegged at 9.6 per cent per annum between April and October 2017. Yields are up 0.3 per cent over the same period six months earlier.

Ajman is the UAE’s smallest emirate located north of Sharjah and commuters who live there can reach Dubai in just under  one hour, depending on traffic.

When it comes to rental income, other metropolitan areas around the world don’t even come close to Ajman, with yields in cities like New York only estimated to be around 2.9 per cent.

In Geneva, landlords only earn 3.3 per cent of the money invested, while in Tokyo and Hong Kong, the incomes are even smaller, at 2.7 per cent and 2.6 per cent, respectively, according to figures compiled by Global Property Guide.

Rental yield is one of the most important factors that would-be property owners take into account when deciding whether or not a flat or villa is worth the investment.

It is the money made by landlords each year as a percentage of the property cost, so a studio bought in Ajman for just a little over Dh300,000 may provide the landlord an annual gross income of approximately Dh29,000.

The net rental yield may be lower if other expenses, such as landlord insurance, property management fee, among many others, are included in the calculation.

“Rental yield is one of the most important consideration for a would-be property investor. [It] gives an indication of the expected income generated from a property investment,” Lukman Hajje, CCO of Propertyfinder Group, told Gulf News.

Property prices in Ajman are the most affordable in the UAE, with asking prices averaging just Dh30 per square foot for apartments, according to Propertyfinder, which conducted the research.

The company, however, pointed out that besides Ajman, locations across the UAE have held up well through the real estate slowdown.

Rents may be falling but property owners are still getting good returns on their investment.

“Despite continued decline in real estate prices, since market peak in mid-2014, rental yields throughout the UAE remain strong, and in some cases, attract yields that exceed averages around the world.”

The amount of rental yield, however, is not the only factor that buyers should consider before snapping up a property to let. 

For information on the real estate sector within the UAE, please visit our sister site, getthat.com.

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