As a high-net-worth investor, you might be accustomed to dealing in big assets – skyscrapers, large villas, maybe stocks and startups.
But let me share a surprising truth from my experience as CEO of MYS Real Estate: sometimes the small properties, like one-bedroom apartments, can deliver outsized benefits for your portfolio. In Dubai’s real estate market, these “gems” are often underrated by wealthy investors, yet they consistently produce strong cash flows and diversification advantages.
Steady High Yields –
Dubai’s one-bedroom apartments offer excellent rental yields. Gross rental returns of 6-8% are common in prime locations fazwaz.ae, far outpacing rental yields in many global cities. For context, apartments in Dubai average around a 7.5% gross yield nikoliers-global.com, whereas villas yield about 5.3% globalpropertyguide.com. Smaller units typically generate higher rental yield percentages than larger luxury properties – meaning your investment works harder. In some popular communities, one-bedroom units are fetching 8-9% annual returns, and a few exceptional projects even exceed 10% rental yield nikoliers-global.com nikoliers-global.com. All this, tax-free – the UAE levies no annual property tax or rental income tax, so that yield is largely net phoree.ae. Imagine earning ~7% yearly on a property’s value, in a stable currency, with minimal deductions; it’s like a high-interest bond backed by real estate.
Diversification and Stability –
One-bedroom apartments add balance to a portfolio. They’re real estate’s “blue chips” – modest, reliable performers that can offset volatility elsewhere. When equities swing or a large commercial deal goes through a dry spell, your residential rental income from these units still flows in steadily every month. Dubai’s rental market is underpinned by strong demand, so vacancies are low (the city’s occupancy rate is around 89% on average nikoliers-global.com). Even during market fluctuations, there’s a deep pool of tenants (young professionals, couples, expats) always looking for quality one-bedroom rentals. This makes your rental income more predictable and resilient against downturns. In fact, the long-term rental market in Dubai currently shows “strong fundamentals…which minimize possible risks of volatility” nikoliers-global.com. Owning a few small apartments can act as a stabilizer for your portfolio – a counterweight to riskier investments.
Liquidity and Flexibility –
High-end assets can tie up a lot of capital and take time to sell. In contrast, one-bedroom units are highly liquid in Dubai’s active market. There were over 180,000 real estate transactions in Dubai in 2024, up 36% from the previous year globalpropertyguide.com, and the bulk of those were apartments. Smaller units attract not only end-users but other investors, both local and international. If you ever needed to free up cash, selling a one-bedroom is faster and easier than offloading a large trophy asset. Apartments comprised 102,800 of the units sold in the first 3 quarters of 2024 globalpropertyguide.com– an indication of how much movement and buyer interest there is at that level. High liquidity means flexibility: you can enter and exit positions more nimbly, rebalance your holdings, or take advantage of new opportunities as they arise.
Let me share a quick story. One of my clients, a seasoned investor with a global portfolio, decided to “test the waters” by adding a pair of one-bedroom apartments in Dubai to his holdings. He was intrigued by the numbers we showed him. Fast forward a year: those two little units have become the most consistent earners in his real estate portfolio, yielding roughly 7% net annually and hardly ever vacant. He told me it’s almost like having “two ATMs that dispense rent” every month. Not only that, the value of each apartment appreciated by double-digits alongside Dubai’s booming market globalpropertyguide.com. Now, he’s looking to acquire more one-beds, seeing them as a strategic way to balance and boost the overall performance of his investments.
The takeaway for HNWI investors:
Don’t overlook one-bedroom apartments as merely “entry-level” properties. In Dubai, they are high-yield, low-hassle assets that can enhance your portfolio’s cash flow, provide diversification, and offer flexibility without compromising on returns. These compact properties punch above their weight – combining the stability of real estate with the agility your portfolio needs.
Even if you typically think big, it might be time to think small (strategically!). If you’re considering adding a high-performing one-bedroom unit to your investment mix, reach out to me directly. I’d be happy to share current opportunities and craft a data-driven plan for integrating Dubai one-bedroom apartments into your portfolio. Let’s make your money work smarter. 🚀
