Mr. Ahmed buys a splendid 1 bedroom apartment at The Greens for AED 950,000. He is able to secure financing with HSBC at 80% LTV over a 20 year repayment period.

Henceforth the loan/mortgage amount is 80% of 950,000 that is 760,000.

Original Investment:
He makes a down payment of AED 190,000 to make up the difference. A typical repayment mortgage interest rate for the Dubai market is 8.5% annually.

Financing Cost:
The monthly mortgage repayment is:

Interest only Mortgage
760,000 (loan/mortgage amount) * 0.085 (Interest rate) = AED 64,600 / 12 (months) =
AED 5,383 per month.

Repayment Mortgage
Including the repayment portion of the loan = AED 80,304 / 12 (months) = AED 6,692 per month

Rental Income:
Typical rental income for a 1 bedroom apartment at the Greens is AED 90,000 annually which is a rental yield of around 9.47%. A benefit to rent property in Dubai is that rents are paid annually and in advance.

Net income from rent is:
Interest only Mortgage: 90,000 (Rental income) – 64,600 (Mortgage payment) =
AED 25,400.

Mr. Ahmed receives a net income of AED 25,400 annually.
Repayment Mortgage: 90,000 (Rental income) – 80,304 (Mortgage payment) =
AED 9,696.

Mr. Ahmed receives a net income of AED 9,696 annually.

Looking at property selling prices over 2005 and 2006, property has appreciated 25% on average annually in Dubai.
 
Capital Appreciation:
 Increase of 25% annually: 950,000 * 0.25 = 237,500

Return on Investment: Mr. Ahmed had a fruitful return of 138% on his initial investment of AED 190,000 in just 2 years. 

Interest only Mortgage: 25,400 (Rental return) + 237,500 (Capital appreciation) = AED 262,900.

Return on Investment: 262,900 / 190,000 (Down payment) = 138%
 
Mr. Ahmed still had a beneficial return of 130% on his initial investment of AED 190,000 if opted for the re-payment mortgage.
       Re-payment Mortgage: 9,696 (Rental return) + 237,500 (Capital appreciation) = AED 247,196.
       Return on Investment: 247,196 / 190,000 (Down payment) = 130%