Short answer
Gross yield is annual rent divided by price. Net yield subtracts vacancy and yearly costs such as property tax, maintenance and agent fees before dividing by price.
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Notes
- Mortgage interest is not included. Compare net yield with your loan rate.
- Property tax for non-owner-occupied homes is higher than the owner-occupier rate. IRAS charges 12% to 36% of annual value on non-owner-occupied homes, against 0% to 32% for owner-occupiers.
Sources to check
Frequently asked questions
What is a good net rental yield?
It depends on your financing cost and risk appetite. Compare the net yield with your mortgage rate and consider price risk.