Buying your first investment property
Almost every first purchase goes wrong in the same place: the advertised yield is a gross yield, and the costs that turn it into a net one are not in the listing. Work through these in order and you will price a property the way its eventual buyer will, rather than the way its seller does.
Read these in this order
10 frameworks. Each one ends in a number rather than an opinion.
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01Net rental yield in Dubai
Net rental yield in Dubai is rent after all running costs, over the price plus the statutory 4.00% Land Department fee and agency costs: 4.33%, not 7.00%.
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02The one percent rule, and why it does not travel
The one percent rule says a rental property should let for at least one percent of its purchase price every month, which is a screening shortcut built on one country's cost structure and gives badly wrong answers in any market where those costs differ.
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03Mortgage capacity in Dubai
The Central Bank sets three caps on a Dubai mortgage, not two, and the deposit advertised as 20% is 26.91% of the price once the cash is counted.
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04Transaction costs and the minimum hold period in Dubai
Buying and selling the same Dubai apartment costs 9.72% of the price with a mortgage on both sides, which is 2.11 years of net rent, and on the Land Department's own index holding longer did not improve the odds of clearing it.
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05Dubai service charges and the reserve fund
Dubai service charges under Law No. (6) of 2019: your share is the deed area, no charge without RERA approval, and the reserve sits in a separate account.
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06Due diligence before buying property in Dubai
Due diligence in Dubai divides into the checks that decide whether you own anything at all and the checks that decide what it is worth, and only the second kind can be ranked, which on a one bedroom at AED 1,500,000 puts the two document checks almost nobody performs at 7.5 times the registration fee split every buyer argues about.
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07Margin of safety, and what it costs
Buying only at a discount to your own estimate of value protects against the estimate being wrong, and the discount is not free, because every point of it also turns away things that were worth buying.
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08Off-plan vs ready property in Dubai
On the same Dubai apartment priced as cash flows, a payment plan's time value roughly pays for the rent an off-plan buyer gives up, so what decides off-plan against ready is not the discount but whether the unit is worth as much as a ready one on handover day, where five percent less moves the answer further than a two year delay.
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09Mortgage versus cash
Borrowing to buy a property raises the return on your own money whenever the net yield exceeds the mortgage rate and lowers it whenever it does not, so the decision is not about affordability, it is about whether the spread between those two numbers is wide enough to pay you for the risk.
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10Break-even occupancy in Dubai
Break-even occupancy on a Dubai holiday home is 67.9% against the annual tenancy it replaced, not the 28.2% every page prints against zero.
Run your own numbers
Nothing is stored and nothing is sent anywhere. The arithmetic runs in your browser.
Gross yield is what the brochure shows you. This is what reaches your account.
The unrecoverable cost of owning against the unrecoverable cost of renting.
Terms you will meet
Each is one sentence, then the trap it hides.
The first property checklist
The five stages in the order the decisions arrive, with the questions to ask at each one, including the costs that are never in the listing. It downloads the moment you subscribe, on this page, rather than arriving by email later.
Free. Unsubscribe in one click. The frameworks it points at are ungated and always will be.
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Investments Playbook publishes educational research and general information. Nothing on this site is personal investment advice, a solicitation, or a recommendation to buy or sell any asset. Property and securities can fall in value. Past performance does not predict future returns. Figures shown are indicative and may be delayed. Always take regulated professional advice before acting.