Dubai has become one of the world’s most attractive investment destinations in recent years. High rental yields, international investor-friendly policies, and short-term rental opportunities like Airbnb are attracting many. However, as with any investment, income from real estate in Dubai comes with some hidden costs . Let’s take a look at the annual rental yield and expenses for an apartment worth AED 1,000,000 (approximately $272,479 ).
Gross Return: AED 80,000
Your annual rental income is 80,000 AED , or 21,800 USD .
This translates to an average monthly income of $1,816 . However, this is gross earnings, meaning it’s before expenses are deducted.
Housing Tax: 5%
When renting through Airbnb in Dubai, you must pay a housing tax calculated according to the market value of the area .
- 5% tax on annual income of AED 80,000 = AED 4,000
- That is approximately 1,087 USD
Your annual rental income after this deduction: $21,800 → $21,000
Management Expense
Every building in Dubai has a management fee . For example, for this apartment:
- Annual: AED 9,856 (~USD 2,685)
Your income after this expense: $21,000 → $18,315
Airbnb Expenses (Monthly Bills)
If you run an Airbnb, you’ll have regular expenses to get your property ready for guests. For example:
- Internet (DU package): 400 AED
- Natural gas: 40 AED
- Cooling: 200 AED
- Water: 26 AED
- Electricity (DEWA): 67 AED
Total: AED 740/month = AED 8,880/year (~$2,416)
Your net rental income with these expenses: $18,315 → $15,899
Return on Investment (ROI) Calculation
- Value of the apartment: 272,479 USD
- Net annual rent: $15,899
ROI = (15,899 ÷ 272,479) x 100 ≈ 5.8%
Result: Difference Between Gross and Net
While there is an attractive rental income of 21,800 USD on paper, your net income drops to 15,899 USD due to invisible items (housing tax, management cost, bills) .
This shows that while gross ROI for Dubai real estate can be as high as 8%, net ROI is actually in the 5–6% range.
| Pen | AED (Annual) | USD (Yearly) | Explanation |
| Gross Rental Income | 80,000 AED | 21,800 USD | Monthly average $1,816 |
| Housing Tax (5%) | -4,000 AED | -1,087 USD | Airbnb housing tax |
| Management Fee | -9,856 AED | -2,685 USD | Site fees are paid for 3 months. |
| Airbnb Expenses (Invoices) | -8,880 AED | -2,416 USD | Internet, electricity, cooling, water, natural gas |
| Net Rental Income | 58,264 AED | $15,899 | After all expenses |
