How return is built
Standard: Total return = (sum of net rent) + (sale price − purchase price − transfer costs). At The Lofts, an additional value lever is refurbishment — buying an original-finish unit, refreshing it, and capturing the spread between original-finish and refurbished comparables.
Worked example — original-finish 1BR, 5-year hold
Assumptions: purchase at AED 1.5M (original-finish entry), gross rent AED 75,000 (5% yield), net rent ~AED 50,000. Capital appreciation 4%/year. Sell year 5 at ~AED 1.82M.
| Purchase price | 1,500,000 |
|---|---|
| Net rent, 5 years | ~250,000 |
| Sale price (4% p.a.) | ~1,825,000 |
| Less transfer / agency at sale | ~73,000 |
| Total return | ~502,000 |
| Approximate ROI | ~33% (5 years, ~5.9% annualised) |
Worked example — refurbished 1BR, 5-year hold
Assumptions: purchase at AED 1.5M, refurbishment AED 200K in year 1, refurbished gross rent AED 100,000 (~6.7% on new total cost), net rent AED 70,000/year from year 2. Year-5 sale at AED 2.05M (refurbished comparable).
| Purchase + refurb cost | 1,700,000 |
|---|---|
| Net rent, ~4 years | ~280,000 |
| Sale price | ~2,050,000 |
| Less transfer / agency | ~82,000 |
| Total return | ~548,000 |
| Approximate ROI | ~32% on total invested (similar timeline) |
Trade-offs
Refurbishment lever requires capital, time, and renovation expertise. The yield-only path requires only purchase. Both lead to similar approximate ROI in this example, but the refurbishment path has higher absolute return ceiling if the post-refurb sale captures full premium.