Fawaz Fareed is a real estate consultant and digital strategist with over 12 years of experience in web development and 1.5+ years in the UAE property market. He shares insights to help investors and businesses make smarter, informed decisions.
what is ROI in real estate and how its calculated in both offplan and ready to move property ?
ROI (Return on Investment) means how much profit you earn from a property compared to the amount you invested.
In simple terms ,
“How much money your property makes for you.”
ROI Formula (Basic)
✅ For Rental Properties: ROI (%) = (Annual Rental Income ÷ Total Investment) × 100Two types of ROI
1. ROI for Off plan Properties ( also known as Capital Appreciation )2. ROI for Ready to move properties
ROI for Ready to Move Properties ( How its Calculated )
Example:Property Price = AED 1,000,000
Additional Costs (fees, registration, etc.) = AED 70,000
Annual Rent = AED 80,000
📌 ROI = (80,000 ÷ 1,070,000) × 100 = 7.47% ( NET ROI )
ROI for Off plan Properties ( How its Calculated )
Capital appreciation is the value appreciation buyer gets either before handover ( during project construction ) or after the completion of the project. It means buyer has the option to sell the property before or after the project completion.Example:
Purchase Price = AED 800,000
Value at Completion ( in 3 years )= AED 1,000,000
Profit = 200,000
📌ROI = (200,000 ÷ 800,000) × 100 = 25% ( after 3 years )
OFF Plan VS Ready to Move ( ROI Comparison )
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Factor
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Ready to Move Property
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Off Plan Property
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