Most off-plan brochures show you a projected yield. Rarely do they show you the fees, the service charges, or how long it actually takes to get your capital back. Here's the exact framework I use with every client, and the same one built into the free ROI calculator on this site.
1. Start with the total invested, not just the price
The listed price is never what you actually pay. In Dubai, budget for:
- 4% DLD transfer fee, charged on the property price at the Dubai Land Department.
- OQOOD registration fee, a flat administrative fee for off-plan registration (commonly around AED 5,000, varies by developer).
Add these to the property price to get your real Total Invested figure: the number every return calculation should be based on, not the sticker price.
2. Net cash flow, not gross rent
Gross yield (annual rent ÷ price) looks great on a brochure. What matters is what's left after the building's service charge, typically quoted per square foot, per year. Subtract the annual service charge from gross rent to get your Net Annual Cash Flow.
| Metric | Formula |
|---|---|
| Total Invested | Price + 4% DLD tax + OQOOD fee |
| Net Annual Cash Flow | Annual rent − (sqft × service charge) |
| ROI on Rent | Net Annual Cash Flow ÷ Total Invested |
| Total Expected Return | Net Cash Flow + (Price × Annual Appreciation %) |
| Payback Period (PER) | Total Invested ÷ Net Annual Cash Flow |
3. Add appreciation, but keep it separate
Capital appreciation is real, but it's not cash in your pocket each year. I model it separately from net cash flow so you can see your true rental return alongside your expected total return if the market performs as projected.
4. The payback test (PER)
Divide your Total Invested by your Net Annual Cash Flow to get a simple payback period, in years. That's the real estate equivalent of a Price-to-Earnings ratio:
- 16 years or more → weak investment
- 12–15 years → good investment
- 11 years or less → very good investment
This single number cuts through marketing noise faster than almost anything else.
Run these numbers on your own deal
Use the interactive calculator, switching between AED, USD and EUR, to see the exact figures before you commit.
Open the ROI Calculator