JVC One-Bed Deal Teardown: A Hypothetical Cash-Flow Example

This is a hypothetical one-bedroom apartment calculation set in Jumeirah Village Circle. It is not an observed listing, a valuation, a rent forecast, a current market average or a bank offer. The purpose is to show how attractive gross rent can turn into a much smaller cash surplus once costs and finance are included.

The calculation and references were reviewed on 1 October 2026. All figures below are illustrative assumptions.

Start with a written set of inputs

Input	Hypothetical assumption
Purchase price	AED 750,000
Unit area	750 sq ft
Full-year rent before vacancy	AED 60,000
Annual service charge rate	AED 15 per sq ft
Annual service charge	AED 11,250
Vacancy allowance	AED 5,000, equivalent to one month's assumed rent
Management cost	AED 3,000, assumed as 5% of full-year rent

The service charge rate is invented for this example. For a real unit, check the project and year in the DLD Service Charge Index, confirm the chargeable area and obtain the applicable statement. The management contract may use a different fee base or include additional charges.

Separate gross yield from operating income

The gross yield on the assumed purchase price is:

AED 60,000 ÷ AED 750,000 × 100 = 8.00%

Subtracting the selected operating costs gives:

AED 60,000 − AED 11,250 − AED 5,000 − AED 3,000 = AED 40,750

That is 5.43% of the purchase price before the omitted costs below. It is not a complete net yield. This simplified calculation excludes repairs, insurance, major replacements, any other owner-paid costs and acquisition costs. Including applicable operating costs reduces operating income; including acquisition costs increases the investment denominator.

For a real deal, list each omitted item before calling the result net operating income. Mortgage payments are considered separately, because they depend on the buyer's financing.

Calculate the mortgage rather than estimating it

Assume a fully amortising loan with monthly payments, a nominal annual interest rate of 4.5%, and an unchanged rate over 25 years. These are arithmetic assumptions, not available lending terms. With monthly rate r = 0.045 ÷ 12 and n = 300 payments:

Monthly payment = loan principal × r ÷ (1 − (1 + r)^−n)

Arithmetic scenario	Loan principal	Monthly payment	Annual payments	Annual cash after selected costs and debt payments
80% of assumed price borrowed	AED 600,000	AED 3,334.99	AED 40,019.94	AED 730.06
60% of assumed price borrowed	AED 450,000	AED 2,501.25	AED 30,014.95	AED 10,735.05

Annual amounts use the unrounded monthly calculation. Both cash figures still exclude the omitted ownership costs and lender fees. A floating rate, different repayment structure or different term changes the result.

The 80% row is not a financing entitlement for a rental investment. The CBUAE mortgage regulations distinguish expatriate first owner-occupied homes below AED 5 million, with an 80% maximum loan-to-value ratio, from investment or subsequent properties, with a 60% maximum. They also set a maximum 25-year tenor. Regulatory ceilings do not establish individual approval or require a lender to offer the maximum.

Count all the cash invested

Cash-on-cash return uses the actual cash invested, including the down payment and applicable cash acquisition costs. Confirm registration charges through the DLD sale registration service, then add the quoted broker, finance and other applicable costs. Do not divide by the down payment alone while ignoring these payments.

Principal repayment builds equity but is still a cash outflow in the mortgage payment. An assumed future sale gain is a different, uncertain component; it does not pay this year's bills.

Decide what needs evidence next

A lower asking price would change this example's arithmetic, but would not by itself establish that the apartment is below market value. That requires a suitable transaction benchmark.

For an actual JVC unit, replace each assumption with an observed document or a clearly labelled scenario. Use the Dubai deal analyzer to compare rent, vacancy, repairs and interest-rate assumptions. If a small change removes the surplus, that is a reason to investigate the inputs carefully before deciding whether the purchase fits your finances.