Cash invested is everything you pay on day one: the down payment (or full price if paying cash) plus DLD, trustee, title deed, agency and NOC fees, and, with a mortgage, the bank arrangement fee, mortgage registration and valuation.
Net operating income (NOI) is rent after vacancy, minus service charge, management, maintenance and re-letting. It ignores financing.
Net rental yield = NOI ÷ (price + buying costs). It shows how the property performs whether you pay cash or borrow.
Cash flow = NOI − mortgage payments (principal + interest) − bank-required insurance. Cash-on-cash = year-1 cash flow ÷ cash invested.
Total ROI, year 1 = (cash flow + value growth) ÷ cash invested. With a mortgage, a second figure adds the loan principal repaid, because that money becomes your equity even though it doesn’t reach your pocket.
Off-plan: you pay the booking amount and buying costs on day one, then construction instalments each year until handover, then the handover payment (from your cash, or from a mortgage up to 80% of the price), then any post-handover instalments. Until handover there is no rent, no service charge and no mortgage; the value grows by the total off-plan growth you enter, spread evenly over the construction years. If you sell before handover, the buyer takes over the remaining payments, so your profit is the value growth minus selling costs, measured against what you’ve paid so far. Net ROI always divides by the cash you’ve actually paid by the time you sell.
During a developer guarantee, income is the guaranteed amount. Service charge, management, maintenance and re-letting still apply from year 1, calculated on that income; only vacancy is left out, because the developer pays whether or not the unit is let.
Net ROI over the holding period = (all cash flows received + net sale proceeds − cash invested) ÷ cash invested. Net sale proceeds = sale price − selling agency fee (+ VAT) − remaining loan − early settlement fee (1% of balance, capped at AED 10,000).
IRR is the yearly return that accounts for when each dirham arrives, so it’s the fairest way to compare cash against a mortgage, or this property against other investments.