Renting through a management company: real yield vs promised

"Guaranteed rental yield 7–10%" is a standard developer line. Behind it lies a contract that reads, in small print: gross, pre-tax, at 90% occupancy, excluding service fee, excluding furniture amortization, for the first 3 years. Do the real math and you often get 4–5% net.

Let's work through three scenarios honestly.

Case 1: Dubai, JVC studio, 250,000 USD

**Marketing pitch:** 8% guaranteed rent for first 2 years via developer's management company.

**In the contract:** - 8% of "registered value", not full. DLD registers 90% of price (standard to reduce transfer fee for future buyers). So 8% of 225,000 = **18,000 USD/year**, not 20,000. - The "guarantee" only applies if you sign a 2-year contract with their management company. - First 3 months — grace period without payouts ("looking for a tenant").

**What's not said:** - Service fee — 22 USD/sqm × 42 sqm = **924 USD/year**. - Housing fee 5% via DEWA = **900 USD/year**. - Ejari — 220 AED = **60 USD/year**. - Management commission is baked into the "8%", but for short-term (Airbnb) they take **20% of turnover**; long-term follows the 8% terms. - Chiller — 400–800 USD/year. - Furniture amortization — 500–800 USD/year realistically.

**Actual:** - Gross: 18,000 USD (over 9 of 12 months). - Costs: 924 + 900 + 60 + 700 + 600 = **3,184 USD**. - Pre-tax: **14,816 USD** = **5.9%** yield. - Russian NDFL 13%: **1,926 USD**. - **To you: 12,890 USD/year = 5.15% net.**

Promised 8%, delivered 5.15%. Gap: 2.85 pp or 35% of the promised figure.

Case 2: Da Nang, LTO studio, 90,000 USD

**Promise:** 10–12% via management, "easy Airbnb".

**Reality 2026:** - Da Nang average annual occupancy: 65%. Peak Jul–Aug and Dec–Feb, dip May–Sep (rainy season + weak demand). - Average Airbnb studio rate: 45 USD/night high season, 22 USD/night low. - Real turnover: (45 × 5 + 22 × 6) × 30 × 0.65 = **6,950 USD/year**. - Management commission 25% (standard in Da Nang): **1,738 USD**. - Airbnb service fee 3%: **210 USD**. - Cleaning: 300 USD/year. - Utilities, wifi, security: 500 USD/year. - VAT 5% + PIT 5% (Vietnam) = 10% of turnover after commission: **500 USD**. - Business licence: 40 USD.

**Actual:** - Turnover: 6,950 USD. - Costs: 1,738 + 210 + 300 + 500 + 540 = **3,288 USD**. - Pre-Russian tax: **3,662 USD** = **4.1%** yield. - Russian NDFL 13% minus Vietnamese 10% credit ≈ 3%: **110 USD**. - **To you: 3,552 USD/year = 3.95% net.**

Promised 10–12%, delivered 4%. Reason: real occupancy 65%, not "advertised 90%".

Case 3: Canggu, 3-bed villa leasehold 25 years, 480,000 USD

**Promise:** "Bali villa gives 15–20% yield."

**Reality:** - Average Airbnb rate for 3-bed in Canggu: 250 USD/night peak (Jul–Aug + Dec–Jan), 130 USD/night otherwise. - Occupancy: 70%. - Turnover: (250 × 4 + 130 × 8) × 30 × 0.7 = **43,890 USD/year**. - Villa management commission: 20% = **8,780 USD**. - Airbnb / Booking fees 4%: **1,755 USD**. - Staff (cleaner, gardener, pool): 4,000 USD/year. - Utilities: 3,500 USD/year. - Repairs & amortization: 2,500 USD/year. - PBB tax: 800 USD. - 10% withholding tax on gross rent: **4,389 USD**.

**Actual:** - Turnover: 43,890 USD. - All costs: 25,724 USD. - Pre-Russian tax: **18,166 USD** = **3.8%** yield **on purchase price**. - Russian NDFL 13% minus Indonesian 10% credit ≈ 3% top-up: **545 USD**. - **To you: 17,621 USD/year = 3.7% net.**

Plus leasehold amortization. Over 25 years you "consume" 4% of asset value per year (480,000 / 25 = 19,200 USD). So **economically it's -0.3% net**. The asset generates cashflow while its value declines.

Promised 15–20%. Real ~4% cashflow yield, near zero after amortization.

What actually delivers close to promise

• **Long-term rental in a ready Dubai property** (via a local agent for 5% single fee, not via management company): clean 5.5–6.5% net — real.
• **Villas with direct long-term tenants** (expats, diplomats, companies) — steady 6–7%, but you have to find and manage.
• **Dubai off-plan with 15–20% capital growth over 3 years** — real if you pick the right project. But that's capital appreciation, not rental.

How to read "guaranteed yield"

Ask for the contract and check: 1. Percentage of which sum (full price / registered / net of taxes)? 2. Guarantee term (usually 2–3 years — then it drops). 3. Are service fee, utilities, chiller included or not? 4. Termination penalties for the management contract (usually 3–6 months of rent). 5. What if the manager "can't find a tenant" — does the guarantee still pay?

If any of these 5 aren't clean — the "7–10%" is marketing.

Realistic net yield for foreign real estate for a Russian buyer: **4–6% net in stable markets**. Anything higher is either qualified or fake.