Dubai rental: AED 697,300 purchase and AED 3,584 monthly rent — sanity check

T

tradeTheChart

Landlord
Established
The advertised figures produce roughly 6.2% gross, but I still cannot reconcile that return with the likely owner expenses. This is a 5-bed Dubai condo offered at AED 697,300, with projected rent of AED 3,584 a month.

I have allowed separately for empty periods, management, ordinary upkeep and an occasional substantial repair. The uncertain items are the building service charge, insurance, any applicable property-related charge and the basis for the rent projection. Which of those usually changes the cash flow most, and would you insist on seeing actual bills and achieved comparable rents before considering an offer?
 
The service charge is the first figure I’d pin down. Annual rent is AED 43,008, so every roughly AED 7,000 of annual owner costs removes about one percentage point from the yield on your purchase price. That means service charges alone could quickly turn 6.2% into something unexciting, before vacancy and management. Do you have the unit’s actual recent charge statement rather than a broker estimate?
 
Also, the combination of “5-bed,” AED 697,300 and AED 3,584 monthly rent deserves verification. It may be accurate, but bedroom count without size, exact location, condition and occupancy status tells us little. Is the rent supported by current comparable units, or is it only a projection? Confirm as well whether AED 3,584 is the effective monthly amount under the proposed tenancy terms.
 
I wouldn’t set a universal net-yield target here. A cash purchase and a financed purchase can produce very different risk, even with the same property-level yield. Financing sensitivity could dominate the service-charge issue if borrowing is involved.

Separate recurring costs from one-off purchase and letting costs, then compare the resulting return with your realistic alternatives. Insurance, tenant turnover and maintenance on five bedrooms should each have their own line rather than being buried in a general contingency.
 
Those three pieces of evidence would help, but I would not treat them as sufficient on their own. Actual service charges, achieved rents for closely comparable condos and written maintenance or management quotes establish the property-level numbers; they do not show whether the investment works after purchase costs and financing.

I would run the operating cash flow first, then add borrowing and one-off costs separately. A normal case and a case with lower rent, vacancy and a significant repair should reveal whether the 6.2% headline survives. If it only works under the broker’s rent assumption and a cash purchase, the broader risk is the issue rather than any single charge.
 
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