I keep going back and forth on a 1-bed apartment in Dubai priced at AED 1,541,000. Expected rent is AED 9,629/month, or AED 115,548 annually, which puts the headline gross yield at roughly 7.5%.
The building appears sound, but I do not want the gross figure to hide a mediocre investment. My conservative model already allows for vacancy, management fees, routine maintenance and a reserve for one larger repair. I am also testing financing sensitivity and the effect of tenant turnover rather than assuming uninterrupted rent.
For those familiar with Dubai apartments, which local recurring or transaction cost is easiest to underestimate—building charges, insurance, leasing costs or something else? After realistic costs and vacancy, what net yield would you require before taking this risk at AED 1,541,000?
The building appears sound, but I do not want the gross figure to hide a mediocre investment. My conservative model already allows for vacancy, management fees, routine maintenance and a reserve for one larger repair. I am also testing financing sensitivity and the effect of tenant turnover rather than assuming uninterrupted rent.
For those familiar with Dubai apartments, which local recurring or transaction cost is easiest to underestimate—building charges, insurance, leasing costs or something else? After realistic costs and vacancy, what net yield would you require before taking this risk at AED 1,541,000?