Two units with an identical gross yield can have meaningfully different net yields once running costs are accounted for, which is why gross yield alone is a starting point, not the full picture.
The gross yield calculation
Gross rental yield is the simplest version: take your expected or actual annual rent, divide by the purchase price, and multiply by 100. Using an illustrative example, a unit bought for $1.2 million renting at $4,000 a month generates $48,000 a year, and $48,000 divided by $1.2 million, times 100, gives a gross yield of 4%. This figure is easy to calculate and useful for a first pass comparison, but it ignores every cost of actually holding the property.
The net yield calculation
Net rental yield starts from the same annual rent but subtracts the recurring costs of ownership before dividing by purchase price: property tax, which differs for owner occupied versus non owner occupier rates, MCST maintenance and sinking fund contributions, fire insurance, periodic repairs and maintenance, and any letting agent commission if you use one. Using the same illustrative $1.2 million unit at $48,000 annual rent, if running costs total a further illustrative $9,600 a year, net income is $38,400, and $38,400 divided by $1.2 million gives a net yield of 3.2%. The gap between gross and net widens further once you factor in mortgage interest, which some investors track separately as a cash on cash return rather than folding into yield.
Why the two numbers can tell different stories
A unit with a high monthly maintenance fee, an older MCST sinking fund needing top up, or a higher non owner occupier property tax rate can show a respectable gross yield while its net yield lags a unit with a lower headline rent but lower running costs. Comparing only gross figures across different projects or unit types can therefore be misleading, and it is worth running the net calculation whenever you are seriously comparing two specific options rather than doing a rough market scan.
Where to get the inputs
Rent figures should come from recent comparable transactions for similar units in the same or a nearby development, not from an asking price you have not verified against actual signed leases. Property tax rates and MCST fee levels are available from IRAS and the specific MCST's financial statements respectively. Building your own worked calculation with real, current figures for the unit you are actually considering will always be more useful than applying a rule of thumb percentage from a different market cycle or a different type of property.
What yield does and does not tell you
Rental yield is a snapshot of income relative to price at one point in time. It says nothing on its own about whether a property is likely to appreciate, how liquid it will be to sell later, or how rents might move over your holding period, all of which depend on separate, project specific and market specific factors. Yield is one input into a broader financial picture, not a standalone verdict on whether a purchase is a good idea for you, and this page describes how the calculation works rather than suggesting what yield you should be targeting or which property you should buy.
Frequently asked questions
What is a typical gross rental yield for a Singapore condo?
Yields vary by property type, district, and unit size, and change over time with rental and price movements, so there is no single figure that applies across the market. Check recent comparable transactions and asking rents for the specific project rather than relying on a market wide average.
Should I use net or gross yield when comparing two units?
Net yield gives a more realistic comparison, since it accounts for property tax, MCST fees, insurance, and repair costs, which can differ meaningfully between two units even at similar purchase prices and similar rents.
Does rental yield tell me whether a property will appreciate?
No. Rental yield measures income relative to price at a point in time and says nothing about future capital appreciation, which depends on separate factors like supply, location and market conditions. Treat yield and appreciation as two distinct measures, not one number.
Want the real net yield worked out for a specific unit?
Winfred pulls actual comparable rents and running costs so you are comparing real numbers, not rules of thumb.
Book a free 30 minute callWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Rates and rules reflect the position as at 9 Aug 2026; verify current figures with IRAS, HDB, or MAS before making any decision.