Gross yield looks great until you subtract maintenance, tax, vacancy, and mortgage. Here's what you actually take home.
Calculate YieldGross yield, net yield, cash-on-cash return — the numbers that actually matter.
Gross yield = (Annual Rent / Purchase Price) x 100. This is the headline number but doesn't account for expenses.
Net yield = ((Annual Rent - Expenses) / Purchase Price) x 100. This is the real return after maintenance, property tax, vacancy, insurance, and repairs.
If you're using leverage (mortgage), the cash-on-cash return measures your return on the actual cash you put in — not the total property value. A $1.5M condo with 25% down ($375K cash) earning $3,000/month net cash flow gives you a cash-on-cash return of about 9.6% — much higher than the gross yield suggests.
Rental income in Singapore is taxable. You can deduct: mortgage interest, property tax, maintenance fees, insurance, repairs, and agent commissions. The net rental income is taxed at your marginal income tax rate (0% - 24% for residents).
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