Thinking about a holiday home as an investment? The yield tells you what it really earns. Here is how to work it out, and which costs to include.
Headline yields are usually gross. To compare a holiday home with a long-term let fairly, work with the net figure.
Annual rental income divided by the purchase price of the property, times 100. Simple, but it ignores costs.
Annual rental income minus annual costs, divided by the purchase price, times 100. This is what you actually earn on your investment.
Service charges, utilities, internet, cleaning and linen, maintenance, furnishing and refreshes, platform commissions, the management fee and the permit.
Usually fewer: service charges, maintenance and agency fees. Utilities are normally paid by the tenant.
An illustration of the calculation only, with round numbers. It is not a projection for any property.
| Step | Example |
|---|---|
| Purchase price | AED 1,000,000 |
| Annual rental income | AED 100,000 |
| Gross yield | 100,000 / 1,000,000 x 100 = 10% |
| Annual costs | AED 30,000 |
| Net yield | (100,000 - 30,000) / 1,000,000 x 100 = 7% |
Want real numbers for your home? Try the revenue calculator or compare short stays and a long-term let.
Gross yield is annual rent divided by the purchase price, times 100. Net yield first takes off annual costs such as service charges, maintenance and fees. Compare net yields when you choose between a holiday home and a long-term let.
It can be, in strong locations with good occupancy, but costs are also higher and income varies by season. The net yield is what counts.
Location, the home itself, nightly rates, occupancy across the year, and how well costs are kept under control. Pricing that follows demand and events makes a big difference.
Use our indicative revenue calculator, or book a call and we will share a projection for your property.
Eight things to check before you hand over the keys.
What full short-stay management covers, and what stays with you.
Why you need a permit to rent short term, and what to prepare.
Short stays or a long-term let: how the two compare.
Book a call and we will share an honest, property-specific view of its short-stay potential.