Dubai: Purchasing property as a first-time homebuyer can be quite overwhelming.
There are many factors that one needs to think about before deciding on a unit.
With many properties now priced under Dh1 million, the current market is in no doubt on the buyer’s side. When buying a property, it’s important to calculate the yield that tells you how much return you are likely to get on your investment.
Gross yield vs net yield
There are two ways yields are calculated: gross yield and net yield. Gross yields are calculated by dividing the property value by the annual rent.
Net yields, however, provide a better picture of your investment. The net yield is calculated by dividing the total purchase cost of the property by the net rental income (to get the net rental income, subtract all running costs such as service charges, insurance, etc. from the gross rent).
Based on the ValuStrat Price Index, the average net returns in Dubai are 4.6 per cent for villas and at 5.8 per cent for apartments.
Best net rental yields
The top ten net rental yields in Dubai according to the ValuStrat Price Index are in the following communities:
Location: Annual net yield
International City 8.2%
The Greens 7.5%
Discovery Gardens 7.1%
Dubai Production City 7.0%
The Lakes 6.7%
Jumeirah Village Apartments 6.2%
The Views 6.2%
Dubai Sports City 6.0%
Jumeirah Village Villas 6.0%