💯Purchase Price: ~AED 1,350,000
💯Annual Rent: ~AED 100,000
💯Service Charge: AED 28.47 per sq. ft. (quite high)

Gross rental yield: 100,000 ÷ 1,350,000 × 100 = 7.4%
Looks great, right? Now let’s factor in reality.

A typical 1-bedroom apartment is around 538 sq. ft.
Service Charge:
AED 28.47 × 538 = ~AED 15,300 per year

Net rental yield:
(100,000 − 15,300) ÷ 1,350,000 × 100 = 6.3%

💯Purchase Price: AED 1,850,000
💯Annual Rent: AED 147,500 (secured under a two-year lease)
💯Service Charge: AED 22.50 per sq. ft.

Gross rental yield: 147,500 ÷ 1,850,000 × 100 = 8.0%
Already looking more attractive.

Now the annual service charges (apartment size: ~650 sq. ft.):

AED 22.50 × 650 = ~AED 14,600 per year

Net rental yield:
(147,500 − 14,600) ÷ 1,850,000 × 100 = 7.2%

💯The lease has expired? The tenant has to leave… right?

This is one of the biggest misconceptions among property owners.

In Dubai, the end of a tenancy contract does not automatically mean the tenant has to move out. If you plan to sell the property or occupy it yourself, you generally need to serve the required 12-month legal notice through the proper channels.

Example: You decide to sell your apartment, but your tenant says, “Sorry, I never received the required 12-month legal notice. Under UAE law, I’m entitled to stay.” And they’ll most likely be right. Until the notice period has legally expired, the tenant can remain in the property.

💯

“It’s my property—I can put whatever terms I want in the contract.”

Unfortunately, that’s not how it works.

Many landlords assume they can include a clause allowing them to evict a tenant at any time or with just 30 days’ notice. But if those terms conflict with UAE tenancy law, they simply won’t hold up.

Example:

A year later, rental prices have increased significantly. You want to raise the rent—or move into the property yourself. Unless everything has been handled in line with the applicable regulations (including RERA rules where relevant and the required notice procedures), your tenant can rely on the law—not on what you’d

prefer

to happen.

💯

“The security deposit will cover any damage.”

Not necessarily.

The tenant moves out, and you notice a few scratches and signs of wear. Your first thought is,

“I’ll just deduct the repair costs from the deposit.”

Without a detailed move-in inspection report documenting the property’s condition, that decision can easily be challenged.

Example:

You deduct money from the deposit, but the tenant disputes it. Now the burden is on you to prove that the damage wasn’t pre-existing—and suddenly you’re spending time, money, and energy on a dispute that could have been avoided.

💯

Forgetting about Ejari

This is one of the most serious mistakes landlords make.

Registering a tenancy contract through

Ejari

isn’t just paperwork—it’s what gives the lease official legal recognition with government authorities.

Example:

Your tenant stops paying rent and you want to take legal action. If the tenancy wasn’t properly registered, the process becomes far more complicated, slower, and much harder to enforce.

💯

“I’ll rent it out without an official contract. It’s easier.”

It might seem easier—but it’s also one of the fastest ways to lose control of your property.

Without a properly registered tenancy agreement, you leave yourself exposed if anything goes wrong.