Resources · Calculators
ROI vs ROE Calculator
Enter the numbers
Cash investedAED 1,000,000
Net annual incomeAED 25,000
ROI (on full price)1.00%
ROE (on cash invested)2.50%
ROI = (rent − operating costs) ÷ purchase price. ROE = (rent − operating costs − mortgage payments) ÷ cash invested. Set mortgage payments to 0 for a cash purchase, in which case ROI and ROE converge. Leverage can lift ROE well above ROI, but it also concentrates risk on a smaller cash base, which cuts both ways.
These figures ignore the one-time buying costs, which lower your first-year return. Add them in the buying and selling costs calculator.
Full explanation in ROI vs ROE: what investors should actually measure.
Frequently asked questions
What is the difference between ROI and ROE in property?
ROI measures return on the full purchase price. ROE measures return on the cash you actually put in. With a mortgage, ROE can be much higher or lower than ROI depending on the interest rate.
Does a mortgage increase my return on a Dubai property?
It can, when the property earns more than the cost of borrowing, because you put in less cash. If the rate is higher than the return, borrowing reduces ROE and adds risk.
Which return should I use to compare properties?
Use both. ROI compares the properties themselves; ROE shows what your own cash earns under your financing. Then stress-test each with a lower rent and an empty month.