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Home › Buy to let in Saudi Arabia: rental yield and return on your cash

Estimate only — not financial advice. Only your lender's offer is binding.

Buy to let in Saudi Arabia: rental yield and return on your cash

Updated

Example, Riyadh: a SAR 1,500,000 flat rented at an example SAR 90,000 a year, one month empty, SAR 9,000 a year in estimated costs, a manager at 5%, the Ejar fee and the letting broker once. Gross yield 6.00% (rent ÷ price), net yield 4.44% in year 1 (what the rent leaves you ÷ price). With 30% down (SAR 500,475 cash on the day) and home finance at an example 5.5%, the rent falls SAR 10,713 a year short of the instalments, so you add money each year. Rent and costs are yours to enter; whether the price rises is your guess.

This page: a home or flat you buy to rent out (long-term lease). What the rent returns on the price and on your own cash, in plain words. For a home you live in, use rent or buy?.
Where is the property?
Matters for non-Saudi buyers: a 2% fee in Riyadh, Makkah and Madinah cities and Jeddah governorate, 0% elsewhere.
You are
Non-Saudis may buy to let only inside the zones REGA maps; a resident's one own-use home in Riyadh or Jeddah city may not be let out. See where you buy matters below.
This is your
A home you rent out is usually not your first home. The 90% financing and the first-home tax relief are for a citizen's first home.
Who finances it?
An example — use your offer's. Assumed to stay the same.
SAR 90,000 is only an example — look up what similar homes rent for; no one publishes official yields.
Between tenants, repairs. Your estimate.
Yearly costs (your estimates)
No official number — your estimate; SAR 7,500 is only an example.
No official number — your estimate; SAR 1,500 is only an example.
0 if you manage it yourself; 5% is only an example.
2.5% unless agreed otherwise in writing, paid by whoever signed with the broker — 0 if that is the tenant.

Always counted: the Ejar registration, SAR 125 a year (who pays it is not stated; counted here as the landlord's). Rent for a home carries no VAT.

If you keep it and sell later

The 5% transaction tax the seller owes is always added.

Nobody knows how rents and prices will move. Fill in up to three sets of your own guesses; the results appear side by side.

Guess 1
Guess 2
Guess 3

Fills 0%, 3% and 6% into guesses 1, 2 and 3. Round test numbers, not a forecast. Replace them with your own.

Buying costs that depend on your deal
Who pays the 5% transaction tax when you buy?
2.5% of the price unless agreed otherwise in writing; 0 if you did not sign with a broker.
VAT on broker commissions
Estimate: the standard VAT rate; no official page we found names brokerage specifically.
Estimate: reported in the press and by a law firm, not on an official page.
Gross yield6.00%rent ÷ price: the headline number, before any cost
Net yield4.44%what the rent leaves you after costs ÷ price
Return on your own cash, year 1-2.14%

Year 1, in riyals

Fill in at least one guess (both boxes) to see what happens if you keep it and sell, or press "Try with simple round numbers".

Cash on the day

    Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.

    The four numbers, in plain words

    • Gross yield — the yearly rent divided by the price. The number agents quote. It ignores every cost.
    • Net yield — what the rent leaves you after empty months, maintenance, insurance, the manager, Ejar and (in year 1) the letting broker, divided by the price. The honest version of the first number.
    • Return on your own cash — the cash the rent leaves you after the finance instalments, divided by the cash you put in on the day. With home finance this can be negative: the rent does not cover the instalments, and you pay the difference every year.
    • Profit if you sell — everything the rent left you over the years, plus what the sale leaves after the 5% transaction tax, the broker and paying off the finance, minus the cash you put in. The "yearly rate your cash earned" turns that into one percentage you can compare with a savings rate — it counts when each riyal came in or went out.

    What the rules say

    • Financing: for any home other than a citizen's first home a bank may finance up to 70% and a real estate finance company up to 85%. The lender's admin fee is at most 1% or SAR 5,000, whichever is lower, plus VAT.
    • Ejar: every lease must be registered on Ejar; a home lease costs SAR 125 a year (who pays it is not stated; the pages count it on the tenant's side when renting and on the landlord's side when letting). Rent for a home carries no VAT.
    • Broker: 2.5% of the first year's rent unless agreed otherwise in writing, paid by whoever signed with the broker.
    • Tax on the rent: we found no official statement on tax on an individual's rental income, so none is counted.
    • Selling: the seller owes the 5% real estate transaction tax by law.
    • Rent rises: in the city of Riyadh rents are frozen for 5 years from 25 September 2025 — keep your Riyadh rent guess at 0% for those years. Elsewhere no official rule limits rises.
    • Non-Saudi landlords: ownership only inside the areas opened to non-Saudis, set by REGA's zones document; in Makkah and Madinah only Muslim individuals. See foreign buyers since 22 January 2026. A resident's one own-use home in Riyadh or Jeddah city (outside the zones) may not be let out.

    Where you buy matters

    • Rent (Riyadh city only): the total rent of existing and new leases may not be raised for 5 years from 25 September 2025, and a vacant home may not be re-let above its last rent. Makkah, Madinah, Jeddah and everywhere else: no official rule on rent increases.
    • Non-Saudi buyer fee: 2% of the value in Riyadh, Makkah and Madinah cities and Jeddah governorate, 0% elsewhere. GCC nationals pay it only in Makkah and Madinah.
    • Where non-Saudis may own: only inside the zones REGA maps on its Saudi Properties portal: named development projects in Riyadh, Makkah, Madinah, Jeddah and AlUla; NEOM, AMAALA and the Red Sea; the economic cities and special economic zones; and towns and governorates in all 13 regions. In Riyadh and Jeddah city the zone is development projects on land within the urban boundary — not the city as a whole.
    • A resident's own home: a legally resident non-Saudi may own one home for housing outside the zones (not in Makkah or Madinah); inside Riyadh or Jeddah's urban boundary that home may not be let out.
    • Makkah and Madinah: as non-Saudis only Muslim individuals may own (a Saudi company with non-Saudi partners may), and only inside the zones.
    • The same everywhere: SAMA's finance rules, the 5% transaction tax and first-home relief, VAT, Ejar registration and Sakani — none of them change with the city.

    Details and the official sources: can foreigners buy property in Saudi Arabia?

    Questions people ask

    What is a good rental yield in Saudi Arabia?

    In Saudi Arabia, no official body publishes rental yields. Gross yield is only rent ÷ price; the net yield after empty months, maintenance, insurance, a manager and Ejar is the number to compare.

    Do I pay tax on rental income in Saudi Arabia?

    We found no official statement on tax on an individual's rental income, so the calculator counts none, in Saudi Arabia. Rent for a home carries no VAT.

    What does a landlord pay to register a lease?

    In Saudi Arabia, every lease must be registered on Ejar; a home lease costs SAR 125 a year. Who pays it is not stated; this page counts it on the landlord's side.

    How much can I finance for a property I rent out?

    In Saudi Arabia, for any home other than a citizen's first home, banks may finance up to 70% and real estate finance companies up to 85%.

    What does selling cost?

    In Saudi Arabia, the seller owes the 5% real estate transaction tax by law, plus the broker's commission (2.5% unless agreed otherwise).