BUYER & SELLER GUIDES

What Return Can You Make on Abu Dhabi Property? A 5-Year ROI Model (2026)

Return on Abu Dhabi property is net rent plus price growth, minus buying and selling costs, over the cash invested. In our illustrative five-year model of an AED 2m apartment at 3% annual growth, a cash buyer makes about 31% (5.5% a year); a 60% mortgage lifts that to about 42%, but turns a 2% annual fall into a loss.

Last reviewed 26 October 2026 by the ODZ Properties advisory team

AT A GLANCE

Total return formula: (Net sale proceeds + net rent received − cash invested) ÷ cash invested
Entry costs: About 4%–5% of the price (registration, commission, mortgage fees)
Exit costs: About 2%–3% (commission 2% + VAT, NOC, clearances; early settlement fee if mortgaged)
Cost break-even, cash buyer: About 1.4 years of net rent covers entry and exit costs in our example
Example result, 3% growth: Cash about 31% over 5 years; 60% mortgage about 42% (illustrative)
Example result, −2% a year: Cash about +7%; 60% mortgage about −14% (illustrative)
UAE tax on individuals: No income or capital gains tax on personally held residential property

How do you calculate ROI on Abu Dhabi property?

Rental yield tells you what a property earns each year. Return on investment (ROI) tells you what you made by the time you sell. Over a holding period it is: net sale proceeds, plus all the net rent you received, minus the cash you put in, divided by the cash you put in. Net sale proceeds are the sale price minus selling costs and any loan you repay.

Three numbers decide most of the result: the net yield (rent after service charges, maintenance, vacancy and management), the change in the property’s value, and the costs of getting in and out. Our rental yields guide shows how to get from gross to net yield; this guide adds growth, costs and leverage over a five-year hold.

What are the assumptions in the worked example?

The model below is illustrative: it shows how the pieces fit, not a forecast for any property or area.

Assumptions for the five-year model (illustrative)
Item	Assumption	Where it comes from
Price	AED 2,000,000 ready apartment, bought to let	Example
Entry costs, cash	AED 83,000 (2% registration, 2% commission + VAT, title deed)	Buying costs guide
Cash invested with a 60% mortgage	AED 899,950 (40% deposit plus all fees)	Cash vs mortgage guide
Net rent	AED 92,000 a year (4.6% net), flat for five years	Rental yields guide; rent flat reflects the 0% rent cap
Mortgage	AED 1,200,000 over 25 years at 4.20% throughout	Illustrative rate; AED 6,467 a month
Price growth	0%, 3% or 5% a year, or −2% a year	Scenarios, not forecasts
Exit costs	2% commission + 5% VAT, plus AED 5,000 for NOC and clearances	Selling guide; NOC fees vary by developer
Early settlement fee	AED 10,000 (1% of balance, capped at AED 10,000)	Central Bank cap for individuals

What does a cash buyer make over five years?

At 3% annual growth the apartment is worth about AED 2,318,500 after five years. Selling costs of about AED 53,700 leave net proceeds of about AED 2,264,900. Add AED 460,000 of net rent (five years at AED 92,000) and subtract the AED 2,083,000 invested: a total gain of about AED 641,900, or 30.8% over five years, about 5.5% a year compounded.

Even with no price growth at all, the cash buyer is ahead: net proceeds of AED 1,953,000 plus AED 460,000 of rent gives a gain of about AED 330,000 (15.8%). The cost break-even is short: entry and exit costs of about AED 130,000 are covered by roughly 1.4 years of net rent. That is why short holds rarely pay in Abu Dhabi unless prices move sharply; see our timing guide.

How does a mortgage change the return?

With a 60% loan, the investor puts in AED 899,950 instead of AED 2,083,000. Net rent of AED 92,000 minus mortgage payments of about AED 77,600 leaves about AED 14,400 a year, a cash-on-cash return of only 1.6% in year one. The payoff comes at the sale: after five years the loan balance has fallen to about AED 1,048,900, and the investor keeps all the growth on a property three times larger than their cash.

Five-year total return on the cash invested, AED 2m apartment (illustrative; before any home-country tax)
Annual price change	Value after 5 years	Cash buyer: gain (return)	60% mortgage: gain (return)
−2%	AED 1,807,800	AED 141,900 (6.8%)	−AED 122,000 (−13.6%)
0%	AED 2,000,000	AED 330,000 (15.8%)	AED 66,100 (7.3%)
3%	AED 2,318,500	AED 641,900 (30.8%)	AED 378,000 (42.0%)
5%	AED 2,552,600	AED 871,000 (41.8%)	AED 607,100 (67.5%)

Leverage cuts both ways. Above roughly 1.5% a year of growth the mortgaged investor earns more on their money; at flat or falling prices the interest cost wins. The mortgage case also assumes the rate stays at 4.20%: Abu Dhabi loans usually reset to EIBOR plus a margin after a fixed period, so test a higher rate. Our cash vs mortgage guide compares the two in more depth.

What growth assumption is reasonable for Abu Dhabi?

Recent growth has been strong: ValuStrat’s Abu Dhabi index rose 17.8% year on year in Q2 2026. Those are city-wide averages after an unusually strong run, not a guide to the next five years for one building. A prudent model uses a modest base case, tests a flat and a falling scenario, and checks the supply pipeline in the chosen area. Our market report and best areas guide give the area context.

Which costs are most often left out of ROI calculations?

Service charge changes. They are set by the approved budget and can rise; see the service charges guide.

Vacancy and re-letting. A month empty between tenants removes about 8% of a year’s rent, plus the letting fee.

Furnishing and capital repairs. Air conditioning, appliances and repainting before resale.

Exit costs. Commission, the developer NOC and, if you have a mortgage, the early settlement fee.

Rate resets. The end of a fixed-rate period can change the cash flow sharply.

Home-country tax. The UAE does not tax individuals on rent or gains from personally held residential property, but your country of residence may; see our property tax guide.

How does off-plan change the ROI calculation?

Off-plan returns depend on the payment plan. You pay in stages, earn no rent until handover and may sell before completion. Measure the gain against the instalments actually paid, include any resale fees and developer charges, and allow for handover delays. Our guides to off-plan property, ready vs off-plan and reselling before handover cover the mechanics.

*Illustrative figures, not financial advice or a forecast. Returns depend on the specific property, financing and market conditions.*

Frequently asked questions

What is a good ROI on property in Abu Dhabi?

There is no single benchmark. Net rental yields of roughly 4% to 6% are common, and total return depends on price growth. In our illustrative five-year model, a cash buyer earns about 5.5% a year at 3% annual growth. Compare any figure with what your cash could earn elsewhere at similar risk.

What is the difference between rental yield and ROI?

Rental yield is one year’s rent as a percentage of the price. ROI is the total gain over the whole holding period, including price growth and buying and selling costs, as a percentage of the cash you invested. A property can have a modest yield but a strong ROI if values rise, and the reverse.

How long should you hold Abu Dhabi property to make money?

Long enough for net rent and growth to cover buying and selling costs of about 6% to 8% of the price in total. In our cash example, that takes about 1.4 years of rent with flat prices, but most investors plan for five years or more to smooth out market cycles.

Does a mortgage increase the return on Abu Dhabi property?

Only when growth and rent beat the interest cost. In our illustrative model, a 60% mortgage raises the five-year return from about 31% to 42% at 3% annual growth, but turns a 2% annual price fall into a loss of about 14% of the cash invested, while the cash buyer stays positive.

Is there tax on property returns in Abu Dhabi?

For individuals holding residential property personally, the UAE does not tax rental income or capital gains. Companies may fall under UAE corporate tax, and investors may owe tax in their country of residence, so check both before you calculate an after-tax return.

What cash-on-cash return can a mortgaged investor expect?

Often low in the early years. In our example, net rent of AED 92,000 less mortgage payments of about AED 77,600 leaves AED 14,400 a year on AED 899,950 invested, a 1.6% cash-on-cash return. Most of a leveraged investor’s return arrives at the sale, through growth and loan repayment.

Sources

General information, not legal or financial advice. Fees and rules change — confirm current requirements with ADREC or speak with an advisor before you commit.