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ROI — full breakdown

AED 2,000,000 property · 3.7% gross / 3.1% net yield · net rent AED 62,000/yr (gross AED 74,000 − service charge AED 12,000).

Assumptions: 4.25% rate · ready term 25y / off-plan 25y · 20% down · 5% appreciation/yr · 5-yr hold · 3-yr build · 2% exit fee.

Most absolute profit

Cash (Off-plan) (AED 1,170,476)

Highest % ROI

Mortgage (Ready) (12.45%)

Cash makes the most absolute money (no interest, more capital working); the mortgage shows a higher % by tying up far less of your cash — but you pay the bank interest and take on leverage risk.

Cash (Ready)

6.45%
annualised total ROI

No loan, no interest — the simplest, lowest-risk option; you keep all the rent.

Upfront cash
AED 2,126,200
Total profit
AED 685,312
Yr-1 cash-on-cash
2.92%
Interest to bank
—

Upfront costs

Property priceAED 2,000,000
DLD transfer (4%)AED 80,000
DLD adminAED 4,200
Agency (2% + VAT)AED 42,000
Total cash to enterAED 2,126,200

Rent

Gross rent / yrAED 74,000
Service charge / yrAED 12,000
Net rent / yrAED 62,000
Year-1 cash flowAED 62,000

Year-by-year (5-yr hold)

YearProperty valueNet rentCash flowEquityCumulative CF
Year 12,100,00062,00062,0002,100,00062,000
Year 22,205,00062,00062,0002,205,000124,000
Year 32,315,25062,00062,0002,315,250186,000
Year 42,431,01362,00062,0002,431,013248,000
Year 52,552,56362,00062,0002,552,563310,000

All AED. Amber rows = construction (no rent). Property value grows at the appreciation rate; rent held flat over the hold. Cumulative CF = running operational cash flow; the final sale proceeds (value − exit fee − remaining loan) land in Total profit AED 685,312 at exit.

Mortgage (Ready)

12.45%
annualised total ROI

Leverage: only 549,490 cash deployed; you pay ~AED 319,831 interest to the bank over 5y.

Upfront cash
AED 549,490
Total profit
AED 342,191
Yr-1 cash-on-cash
-0.96%
Interest to bank
AED 319,831

Upfront costs

Down payment (20%)AED 400,000
DLD transfer (4%)AED 80,000
DLD adminAED 4,200
Agency (2% + VAT)AED 42,000
Mortgage registration (0.25%)AED 4,290
Bank processing (1%)AED 16,000
ValuationAED 3,000
Total cash to enterAED 549,490

Loan & rent

Loan amountAED 1,600,000
Mortgage / monthAED 8,668
Mortgage / yearAED 104,014
Term25 years
Gross rent / yrAED 74,000
Service charge / yrAED 12,000
Net rent / yrAED 62,000
Year-1 cash flowAED -42,014

Year-by-year (5-yr hold)

YearProperty valueNet rentInterestPrincipalCash flowLoan balanceEquityCumulative CF
Year 12,100,00062,00067,29036,724-42,0141,563,276536,724-42,014
Year 22,205,00062,00065,69938,315-42,0141,524,961680,039-84,027
Year 32,315,25062,00064,03839,976-42,0141,484,986830,264-126,041
Year 42,431,01362,00062,30641,708-42,0141,443,278987,735-168,055
Year 52,552,56362,00060,49843,516-42,0141,399,7621,152,801-210,069

All AED. Amber rows = construction (no rent). Property value grows at the appreciation rate; rent held flat over the hold. Cumulative CF = running operational cash flow; the final sale proceeds (value − exit fee − remaining loan) land in Total profit AED 342,191 at exit.

Cash (Off-plan)

7.02%
annualised total ROI

No rent during the 3-yr build; return = appreciation to handover + post-handover net rent. No interest.

Upfront cash
AED 2,084,200
Total profit
AED 1,170,476
Cash-on-cash
—
Interest to bank
—

Upfront costs

Property price (paid over build)AED 2,000,000
DLD / Oqood (4%)AED 80,000
DLD adminAED 4,200
Total cash to enterAED 2,084,200

Rent

Value at handoverAED 2,315,250
Gross rent / yrAED 85,664
Service charge / yrAED 13,892
Net rent / yrAED 71,773
Year-1 cash flowAED 0

Year-by-year (5-yr hold + build)

YearProperty valueNet rentCash flowEquityCumulative CF
Build yr 12,100,000—-750,8672,100,000-750,867
Build yr 22,205,000—-666,6672,205,000-1,417,533
Build yr 32,315,250—-666,6672,315,250-2,084,200
Year 1 after handover2,431,01371,77371,7732,431,013-2,012,427
Year 2 after handover2,552,56371,77371,7732,552,563-1,940,654
Year 3 after handover2,680,19171,77371,7732,680,191-1,868,882
Year 4 after handover2,814,20171,77371,7732,814,201-1,797,109
Year 5 after handover2,954,91171,77371,7732,954,911-1,725,336

All AED. Amber rows = construction (no rent). Property value grows at the appreciation rate; rent held flat over the hold. Cumulative CF = running operational cash flow; the final sale proceeds (value − exit fee − remaining loan) land in Total profit AED 1,170,476 at exit.

Mortgage (Off-plan)

9.61%
annualised total ROI

Pays 60% over the 3-yr build, mortgages the rest at handover (25-yr term); ~AED 159,915 interest over 5y.

Upfront cash
AED 1,297,490
Total profit
AED 997,271
Yr-1 cash-on-cash
2.94%
Interest to bank
AED 159,915

Upfront costs

Paid during build (60%)AED 1,200,000
DLD / Oqood (4%)AED 80,000
DLD adminAED 4,200
Mortgage registration (0.25%)AED 2,290
Bank processing (1%)AED 8,000
ValuationAED 3,000
Total cash to enterAED 1,297,490

Loan & rent

Loan amountAED 800,000
Mortgage / monthAED 4,334
Mortgage / yearAED 52,007
Term25 years
Value at handoverAED 2,315,250
Gross rent / yrAED 85,664
Service charge / yrAED 13,892
Net rent / yrAED 71,773
Year-1 cash flowAED 19,766

Year-by-year (5-yr hold + build)

YearProperty valueNet rentInterestPrincipalCash flowLoan balanceEquityCumulative CF
Build yr 12,100,000———-484,200800,0001,300,000-484,200
Build yr 22,205,000———-400,000800,0001,405,000-884,200
Build yr 32,315,250———-400,000800,0001,515,250-1,284,200
Year 1 after handover2,431,01371,77333,64518,36219,766781,6381,649,374-1,264,434
Year 2 after handover2,552,56371,77332,84919,15819,766762,4811,790,082-1,244,668
Year 3 after handover2,680,19171,77332,01919,98819,766742,4931,937,698-1,224,902
Year 4 after handover2,814,20171,77331,15320,85419,766721,6392,092,562-1,205,136
Year 5 after handover2,954,91171,77330,24921,75819,766699,8812,255,030-1,185,371

All AED. Amber rows = construction (no rent). Property value grows at the appreciation rate; rent held flat over the hold. Cumulative CF = running operational cash flow; the final sale proceeds (value − exit fee − remaining loan) land in Total profit AED 997,271 at exit.

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