Headline gross yields of 6% to 9% look strong, but the net figure after fees, vacancy and tax is usually 3% to 5%, and Riyadh rents are frozen until 2030. Here is how to read the numbers.
Short answer: published gross rental yields in Saudi Arabia run from roughly 5% to 9%, depending on the city, the source and the size of the unit. After management, upkeep, vacancy and tax, a realistic net figure for a foreign owner is closer to 3% to 5%. Treat every number below as an indicative range as of October 2026, not a forecast and not a promise.
Gross yield by city
The figures below come from public aggregators and broker research; they use different samples and disagree, which is why we give ranges.
- National average: about 6.8% gross (Global Property Guide, Q1 2026).
- Riyadh: the same source shows a headline of up to about 8.9%, while other analysts put a typical apartment at roughly 5.5% (a 4.5% to 7% band). The gap is mostly about which districts and unit sizes are counted.
- Jeddah: about 7.9% gross in the aggregate data; larger family apartments can look higher on paper.
- Dammam: apartments around 6.2% to 6.6%; neighbouring Khobar about 5.3% to 7.4% (Bayut). Dammam has the lowest entry price of the big three and the strongest sales momentum in early 2026.
- Mecca and Medina: we found no reliable yield data, and foreign ownership there is subject to extra restrictions (see below). We do not recommend modelling returns on these two cities from headline numbers.
A pattern repeats across cities: studios and compact apartments show a higher gross yield than villas, because the purchase price is lower relative to the rent. Higher yield is not the same as better: small units can also churn tenants faster.
From gross to net: what eats the return
Gross yield is annual rent divided by purchase price. What you keep is lower. Public sources suggest net yields run about 1.5 to 2 points below gross; one broker study puts Riyadh net at roughly 2.8% to 5.2%. The main drains:
- Purchase costs, paid once: the 5% real estate transaction tax (RETT), registration, agent and legal fees, and, for non-Saudis, a disposal fee. See our buying guide for foreigners for the rules and the draft status of the fee, and prices and buying costs for worked budgets.
- Service charges and upkeep in compounds and towers, plus periodic repairs.
- Vacancy between tenants and the time to re-let.
- Property management if you live abroad, see managing property as a remote owner.
- Tax on rent: summaries of the rules say a non-resident individual pays a final 5% withholding tax on gross rent. Saudi Arabia reportedly has no capital gains tax for individuals, but the 5% RETT applies on disposal. Confirm both with a tax adviser before relying on them.
The Riyadh rent freeze
From 25 September 2025 Riyadh suspended annual rent increases on residential and commercial leases for five years, until 2030. Press summaries of the decision say it covers existing and new contracts, caps the rent of a vacant unit at the last registered contract, requires leases to be registered on the Ejar platform, and limits a landlord's right to refuse renewal. Fines of up to twelve months' rent were reported for breaches.
What it means for an investor: the rent you can charge in Riyadh is effectively locked at today's level for years, so a yield bought today will not grow through rent increases, and buying a unit with an old low contract means inheriting that rent. If a unit is vacant or never leased, the cap works differently, so check the exact status. The freeze is specific to Riyadh; we did not find equivalent measures for Jeddah or Dammam, which is one reason analysts watch them as alternatives.
Who can buy to let
A new law on property ownership by non-Saudis came into force in January 2026, with implementing regulations approved on 23 June 2026. It replaced case-by-case approval with designated zones and a central platform run by the Real Estate General Authority (REGA). Ownership is limited to those zones, and the holy cities of Mecca and Medina carry additional restrictions. The details, buyer categories and penalties are in the buying guide; check the REGA map for the exact district before you pay a deposit.
Illustrative example
Assumptions are ours and illustrative only: an 80 m2 apartment bought for SAR 496,000, gross yield 6% (rent SAR 29,760 a year), one month vacant, service and upkeep at 10% of rent, 5% withholding tax on gross rent, and one-off purchase costs of 7.5% added to the price. After vacancy, costs and tax the owner keeps roughly SAR 22,800 a year on an outlay of about SAR 533,000, a net yield of around 4.3%. Change any assumption and the result moves; this is why we model each property separately.
FAQ
Is 8% to 9% yield in Riyadh realistic? It appears in aggregate data, but typical apartment figures from other sources are lower, and the rent freeze means no upside from increases. Treat 8% as a ceiling to verify with real rent contracts, not a base case.
Is Jeddah or Dammam better than Riyadh for yield? Their gross yields are comparable or higher and entry prices are lower, but the markets are smaller and less liquid. Compare actual rent registered on Ejar for the district.
Do I pay tax on rent as a non-resident? Summaries of the rules mention a 5% withholding on gross rent for non-resident individuals. Confirm with a tax adviser, especially if you also live in a country that taxes worldwide income.
Can a foreigner finance the purchase? Banks quote about 4.1% to 5% for foreign residents; access for non-residents is not confirmed. See prices and buying costs.
How we help
We shortlist units that match your goal, model net yield per property with real service charges and the actual contract, and coordinate local lawyers and a property manager. See what we have on the Saudi Arabia page and in apartments for sale.
Informational only, not legal, tax or investment advice. Figures are indicative as of October 2026, sources disagree, and rules and market data change.