Hi, Let's do real math.
Scenario: You invest $1,000,000 in rental property generating 10% gross yield.
In a typical taxed jurisdiction (UK, US, Europe):
- Gross rental income: $100,000/year
- Income tax (let's say 35%): -$35,000
- Net rental income: $65,000
- Actual yield: 6.5%
Now hold for 10 years. Property appreciates 50% to $1,500,000.
- Capital gain: $500,000
- Capital gains tax (20%): -$100,000
- Net gain: $400,000
Total after-tax return over 10 years:
- Net rental income: $650,000 (10 years × $65,000)
- Net capital gain: $400,000
- Total: $1,050,000
Same scenario in Dubai:
- Gross rental income: $100,000/year
- Income tax: $0
- Net rental income: $100,000
- Actual yield: 10%
Property appreciates 50% to $1,500,000.
- Capital gain: $500,000
- Capital gains tax: $0
- Net gain: $500,000
Total after-tax return over 10 years:
- Net rental income: $1,000,000 (10 years × $100,000)
- Net capital gain: $500,000
- Total: $1,500,000
The difference: $450,000
That's 43% more wealth from the exact same property, same yield, same appreciation.
And this compounds. The $35,000 you keep each year in Dubai can be reinvested. Over 10 years, that reinvestment compounds significantly.
This is why I say: a 10% yield in Dubai is not the same as 10% elsewhere.
After taxes, Dubai often outperforms by 30-50% in real terms.
But here's the thing — this advantage only matters if you're actually achieving 10%. And most investors aren't, because they buy wrong.
Next email: I'll break down the off-plan trap and why most investors start underwater from day one.
Arman
P.S. — Save this email. When someone tells you "yields are similar everywhere," show them this math.