Off-plan ROI calculator
The return on an off-plan or ready unit, the cash needed before the keys and what it could be worth held for 5 to 20 years. Type your own figures; it works out as you type, and nothing is sent anywhere.
Total return a year
9.8%
Net return on the total cost plus the growth you expect. Change any figure and it works out again.
- Total cost to buyPrice, the 4% transfer fee and your fees
- AED 1,876,000
- Gross yieldRent a year over the price
- 6.1%
- Net rent a yearRent less the service charge
- AED 90,200
- Net returnNet rent over the price
- 5.0%
- Total return a yearNet return on the total cost plus growth
- 9.8%
- Cash before the keysWhat is paid by handover, with the fees
- AED 796,000
- Return a year on that cashRent and growth over the cash before keys
- 23.5%
| Years | Worth | Profit | On cash in | IRR |
|---|---|---|---|---|
| 5 | AED 2,394,304 | AED 997,188 | 53% | 9.6% |
| 10 | AED 3,055,806 | AED 2,213,848 | 118% | 9.4% |
| 15 | AED 3,900,069 | AED 3,701,691 | 197% | 9.3% |
| 20 | AED 4,977,586 | AED 5,525,294 | 295% | 9.1% |
Sold at the grown value with no selling costs; rent and service charge rise 3% a year. IRR is the average a year, so it eases off the longer it is held.
An illustration on the figures you typed, not advice or a forecast. Returns are never promised; check every figure with the developer and your own advisers.
How the figures are worked out
Total cost is the price, plus the 4% transfer fee, plus the admin and other fees you typed. It is what the buyer pays to own the unit, and the figure the returns are measured against.
Net rent is the rent a year less the service charge (the charge a square foot, times the size). Net return is the net rent over the price, and the total return a year adds the growth you expect to the net return on the total cost.
For off-plan, cash before the keys is the share of the price paid by handover plus the fees. When part of the price is paid after handover, the calculator shows what that is a month against the net rent: the gap the owner fills each month, or the margin when the rent covers it.
The holding years sell the unit at the grown value with no selling costs, count the rent and service charge rising 3% a year, take off what is still owed on any mortgage, and give the profit, the return on the cash put in and the IRR.
These are the sums of the feasibility report in Key Deal, and the same figures can be put side by side for several units in a comparison report. For how to present them to an investor, read how to write an off-plan feasibility report.
In Key Deal
Send it as a branded report.
One sheet per unit type on the listing, the payment schedule month by month, the client’s own figures and a second currency, as a PDF in your brand.
See the feasibility reportQuestions
How is the total return a year worked out?
It is the net return on the total cost (the rent after the service charge, over the price plus the 4% transfer fee and your fees) plus the growth a year you typed. It is the same figure Key Deal's feasibility report leads with.
What is the difference between gross yield and net return?
Gross yield is the rent a year over the price. Net return takes the service charge off the rent first, so it is closer to what the owner keeps. A unit with a high service charge can have a good gross yield and a modest net return.
What does cash before the keys mean?
On an off-plan unit, it is everything paid by handover: the share of the price the payment plan asks for before the keys, plus the fees. The return on that cash is what makes a plan that asks for less up front attractive to an investor.
How does the mortgage change the figures?
With a share of the price borrowed, the yearly payment (interest and capital) is worked out at the rate and over 25 years, and the holding years count what is still owed. A loan that costs about what the property earns can show little gain after the payments, even though the capital repaid builds the owner's equity.
Are these figures a forecast?
No. The calculator works on the rent, growth and costs you type, and the result is only as good as those figures. Nothing here is advice; the client should check every figure with the developer and their own advisers.
Can I send this to a client?
In Key Deal, yes: the same sums are kept on the listing for each unit type and come out as a branded feasibility report with the payment schedule month by month, the holding years and the client's own figures and a second currency beside the dirhams.
From a calculator to a client's report.
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