Rental Yield Formula Explained, With Examples
Every rental yield result comes from one formula. Once you understand what goes into it, you can sanity-check any figure you are given, whether by an employer, a bank, a teacher or another website.
The formula
Gross yield = annual rent ÷ price; net yield = (annual rent − annual costs) ÷ price.
What each input means
- Property price (S$): the value you enter in the calculator.
- Monthly rent (S$): the value you enter in the calculator.
- Annual costs (S$): the value you enter in the calculator.
Example
For example, with these inputs:
- Property price (S$): 1,100,000
- Monthly rent (S$): 3,800
- Annual costs (S$): 9,000
the calculator returns:
- Gross rental yield: 4.15%
- Net rental yield: 3.33%
- Net annual income: S$36,600.00
How the result changes
The table keeps the other inputs at their example values and changes property price (s$).
| Property price (S$) | Gross rental yield | Net rental yield | Net annual income |
|---|---|---|---|
| 1,100,000 | 4.15% | 3.33% | S$36,600.00 |
| 550,000 | 8.29% | 6.65% | S$36,600.00 |
| 825,000 | 5.53% | 4.44% | S$36,600.00 |
| 1,375,000 | 3.32% | 2.66% | S$36,600.00 |
| 1,650,000 | 2.76% | 2.22% | S$36,600.00 |
Why it matters
Property is the largest purchase most Singaporeans make, and stamp duties, loan limits and cash requirements are front-loaded. Small mistakes in these figures can mean a shortfall at completion, so it pays to run the numbers before you commit to an option to purchase.
Beyond the price, buyers should budget for legal fees, valuation, home insurance, renovation and furnishing. Running the figures in advance helps you decide how much cash to hold back and whether a smaller loan or longer tenure makes more sense.
Stamp duties are paid upfront. Buyer's Stamp Duty applies to every purchase at tiered rates up to 6%, while ABSD depends on the buyer's residency status and how many residential properties they already own. Sellers who dispose of a property within the holding period pay Seller's Stamp Duty.
Most Singaporeans live in HDB flats, which can be financed with an HDB concessionary loan at 0.1% above the CPF Ordinary Account rate or with a bank loan. Private property must be financed with a bank loan, and banks offer fixed, floating and SORA-pegged packages.
Related calculations
- Property Affordability Calculator: Estimates the biggest loan and property price your income supports under TDSR, using the stress-test rate banks apply.
- Home Loan Refinancing Calculator: Compares your current mortgage with a new rate to show the monthly saving and how long switching costs take to recover.
- Property Downpayment Calculator: Splits the downpayment into cash and CPF and shows the remaining loan.
- Buyer's Stamp Duty (BSD) Calculator: Calculates Buyer's Stamp Duty on a Singapore residential property using the tiered rates from 1% to 6%.
Use the Rental Yield Calculator to plug in your own numbers.
Run your own numbers: Rental Yield Calculator