"10% Net Yield" - Really...? Why headline yields are the most misunderstood number in property

Ras Al Khaimah has moved quickly into the international property conversation.

It is increasingly discussed as an emerging destination: new infrastructure, global hospitality brands, and a clear ambition to reposition itself on the world stage. As attention grows, the way opportunities are described tends to simplify.

Yield becomes the shorthand.

This is not unusual. In fast-moving markets, developers and agents lead with numbers that travel easily. Buyers, often navigating their first or second international purchase, look for familiar anchors. Over time, optimistic assumptions begin to feel normal rather than exceptional.

But yield is not a headline.

It is an outcome.

To make this tangible, consider a simple example.

Al Marjan Island is Ras Al Khaimah’s flagship waterfront district, built around the Wynn Casino Resort, branded residences, and new residential communities. For many European buyers, it is the first point of reference when assessing the market.

Assume a buyer purchases a new-build two-bedroom apartment on Al Marjan Island for AED 2.2 million. Registration fees apply, taking the true purchase cost to roughly AED 2.3 million.

A 10% net yield on that investment implies around AED 230,000 a year in net rental income.

Not once, but every year.

To reach that level of net income, the gross rent must be materially higher (so as to allow for voids, operating costs, maintenance, service charges, and management etc.). If the property is financed, it must be higher still.

This is where expectations often drift.

In RAK today, that level of sustained rental performance is far more credible with large, high-quality family villas, typically 4,000+ square feet, with five bedrooms and a tenant profile able to absorb higher absolute rents.

It is much less representative of what a two-bedroom apartment can realistically deliver in the early years of RAK's developing rental market.

This does not mean strong yields are impossible. Over time, as demand deepens and pricing adjusts, outcomes will improve. The issue is that future-state performance is often assumed to exist immediately, and to apply uniformly across very different asset types.

In young markets, demand builds unevenly. Supply often completes in clusters. Pricing power takes time. Costs accrue regardless.

None of this undermines Ras Al Khaimah’s long-term fundamentals. The growth story remains compelling. The mismatch lies in when certain assumptions are applied, and to what type of asset.

This is why independent advice matters.

In fast-growing markets, buyers are exposed primarily to developer-led and agent-led narratives. These perspectives are not necessarily wrong, but they are incomplete. Without an independent view of how rental demand, pricing, and absorption actually develop, expectations are easily pulled forward ahead of reality.

At Dean Property, we believe strongly in RAK's long-term trajectory but we want to ensure that your decisions are made with expectations aligned to the market as it exists today — not the market it is expected to become.

Fast-growing markets do not reward optimism on schedule.

They reward judgement that understands timing, context, and asset quality.