Rental Yield in Singapore: Gross vs Net and What's Realistic

Rental yield is the number every property investor quotes and the one most often misread. A headline “gross yield” can look healthy and still leave you cash-flow negative once the real costs land. Here is how to calculate yield properly, what is realistic in Singapore, and why yield is only half the story of whether a property makes money.

The two formulas

Gross rental yield is annual rent divided by the purchase price. Say a $1.2 million condo rents for $3,500 a month: that is $42,000 a year, or a 3.5% gross yield. Net rental yield is the honest version — it deducts the annual running costs from the rent first. Take the same flat, subtract, say, $12,000 of yearly costs, and the net yield falls to around 2.5%. Always compare properties on net, and be clear whether your figure includes or excludes mortgage interest, which is really a financing question rather than a property one.

What’s realistic in Singapore

Gross yields are modest here. Dated surveys through late 2025 put the private-residential average around 3% (Global Property Guide), with prime, central condos typically at or below that and suburban units a little higher because their entry prices are lower. Official URA data showed rents roughly flat to softening over 2025, which compresses yields when prices hold. Treat any yield figure as a snapshot tied to its date, not a fixed law.

The costs that turn gross into net

Several line items separate the two. The largest surprise is property tax: a rented home is taxed at the non-owner-occupier rates, which are progressive and run from 12% up to 36% of the Annual Value — far above owner-occupier rates, as the property tax guide explains. Then come condo maintenance (MCST) fees, agent commission of around half to one month’s rent per tenancy, landlord insurance, a vacancy allowance, and income tax on the net rent at your personal rate. Together these commonly knock one to one-and-a-half points off the gross figure.

The HDB subletting caveat

HDB flats can show higher gross yields because their prices are low relative to rent — but the rules are strict. Only citizens may sublet a whole flat (PRs can rent out spare rooms only), and only after the five-year Minimum Occupation Period, with HDB’s approval. The full mechanics are in subletting your HDB flat. A high paper yield you are not allowed to realise is no yield at all.

Why yield isn’t the whole return

Total return = rental yield plus capital appreciation, and over a long hold, appreciation is often the larger component. Two things then reshape the real number. Financing: when your mortgage rate sits below your gross yield, borrowing lifts your return; when it sits above, it erodes it. And ABSD: for citizens it is 0% on a first property but 20% on a second and 30% on a third (from April 2023) — a large upfront cost that gross yield ignores entirely and that can take years of rent to recover.

How to actually use yield

Use net, not gross; compare against a dated benchmark rather than a number you half-remember; and set it beside appreciation prospects, financing cost and ABSD before you call anything a good investment. Yield tells you what the property pays you to hold it — location and growth tell you what it will be worth, which is where the liveability rankings earn their keep. Keep the whole picture inside what you can afford.

Figures on this page are computed from the current snapshot and update each rebuild. Contains information from data.gov.sg (Singapore Open Data Licence) and OneMap, Singapore Land Authority. This is general information for research, not financial or professional advice.