Canadian Investor: Diversification and Rental Income
A Toronto-based investor with AED 2.5M to allocate, prioritising rental income and geographic diversification outside Canada. The brief starts the same way it always does: not “what can we sell you,” but “what does this capital actually need to do.”
Two properties came up in the same price range, with different headline numbers.
Why the comparison matters
Property A’s 6.40% gross yield looks stronger on paper. But once service charges, management, a maintenance reserve and a realistic vacancy allowance are factored in, its estimated net yield drops to 4.24%. Property B’s lower headline yield (6.00%) survives the same deductions better, landing at an estimated 5.00% net, because its ongoing costs are structurally lower.
Neither number is “correct” on its own. Gross yield is useful for quick comparison. Net yield is what actually reaches the investor’s account.
Illustrative figures only. Actual rents, charges, vacancy and investment performance vary. This is a worked example of the method, not a specific property recommendation.
Property A
Property B
"The first property looks better in an advert. The second may be the better investment. That's why I don't stop at headline ROI."
The simple version
- Objective
- Income
- Budget
- AED 2.5M
- Headline yield
- 6.40%
- Estimated net yield
- 5.00% (Property B)
- Supply risk
- Medium
- Liquidity
- Medium
What this demonstrates
- Gross yield vs net yield
- Real ownership costs, not just the advertised number
- Comparative analysis over headline marketing figures
Frequently asked questions
What was the goal in "Canadian Investor: Diversification and Rental Income"?
International diversification and rental income. The budget was AED 2.5M, for a buyer moving Toronto to Dubai.
How did the gross and net yields compare?
Property A at AED 2,500,000: 6.40% gross, 4.24% net. Property B at AED 2,500,000: 6.00% gross, 5.00% net.
What was the recommendation?
Compare further before committing. The first property looks better in an advert. The second may be the better investment. That's why I don't stop at headline ROI.
Is this a real client?
No. It is an illustrative investment scenario, not a real client, showing how I compare properties for someone in this situation. Your own numbers will differ, so treat it as a framework, not a quote.