In Dubai's dynamic property market, the ROI plays a particularly important role in investment decisions. The calculation is based on the formula
(Annual profit / total investment) x 100 = ROI in per cent
The relevant factors are made up as follows:
- Annual profit: Rental income less running costs (administration, maintenance, insurance)
- Total investment: Purchase price plus ancillary costs (estate agent fees, land transfer tax, renovations)
In Dubai, you can currently expect average ROI values of 5-8% some neighbourhoods such as Dubai Marina or Jumeirah Beach Residence promise even higher returns. These values are particularly attractive in an international comparison, as Dubai also offers the following advantages:
- No income and capital gains tax
- High tenant demand due to continuous population growth
- Modern infrastructure and steady increase in value
However, you should also take the following aspects into account when calculating ROI:
- Vacancy risk: Calculate for possible loss of rent
- Currency risk: The dirham is pegged to the US dollar
- Market fluctuations: Property cycles can influence ROI
For a realistic ROI forecast, a detailed analysis of the micro-location and property quality is recommended. Please also note that the ROI should only be one of several factors for a well-founded investment decision. Value appreciation potential and long-term market development are equally important criteria for the success of your investment. Property investment in Dubai.
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