What is a good cash-on-cash return for a Singapore condo?

For a first-property Singapore condo (no ABSD), targeting 3–5% cash-on-cash return is realistic in D19, D22, or D5. In CCR districts (D9/10), CoC is typically 1–2% due to lower yields relative to price. For second-property buyers, ABSD significantly increases the denominator, making positive CoC very difficult without large rental premiums.

How does ABSD affect cash-on-cash return?

ABSD increases the total cash invested (the denominator in CoC calculation) without increasing rental income. For a SC buying a second $1.5M property, ABSD of 20% adds $300K to the denominator. This alone can reduce CoC from 3% to under 1.5%, making the investment a capital appreciation play rather than a yield play.

Last reviewed: 19 May 2026

Cash-on-Cash Return for Singapore Condo: What to Target and How to Calculate

By Winfred Quek · CEA R073319H · Crestbrick

Quick answer: Cash-on-cash return measures annual net rental income after loan repayments, divided by total cash deployed (downpayment + stamp duties + renovation). A condo with $363K cash deployed earning $3,600/month net of loan gives a 11.9% CoC but this example uses high-yield OCR. CCR condos typically yield 1–2% CoC. ABSD on second properties makes positive CoC very difficult for multi-property investors.

Facts verified: May 2026 · Sources linked below

The Cash-on-Cash Formula

CoC Return = Annual Net Cash Flow ÷ Total Cash Invested

Where:

Annual Net Cash Flow = Annual rental income − Annual loan repayments − Property tax − Agent fees − Maintenance
Total Cash Invested = Downpayment + BSD + ABSD (if applicable) + Renovation + Legal fees

Example 1: First-Property OCR Condo (No ABSD)

Item	Amount
Purchase price	$1,200,000
Downpayment (25%, cash + CPF)	$300,000
BSD	$33,600
ABSD	$0 (first property)
Renovation	$30,000
Legal fees	$3,500
Total cash invested	$367,100
Monthly rental income	$3,800
Annual rental income	$45,600
Loan: $900K at 1.6%, 30yr, monthly	$3,155/month
Annual loan repayment	$37,860
Property tax (10% AV ~$28.8K)	$2,880/yr
Maintenance / sinking fund	$1,800/yr
Annual net cash flow	$3,060
Cash-on-Cash Return	0.83%

This looks low. The reason: at 1.6% interest rate, the loan repayment consumes most of the rental income. CoC is a measure of immediate cash yield it does not capture equity build-up from principal repayment or capital appreciation, both of which can be significant.

Example 2: Second-Property with ABSD (SC)

Item	Amount
Purchase price	$1,500,000
Downpayment (25%)	$375,000
BSD	$44,600
ABSD (SC, 2nd property: 20%)	$300,000
Renovation	$35,000
Legal fees	$3,500
Total cash invested	$758,100
Monthly rental income (D15, 2BR)	$4,200
Annual rental income	$50,400
Loan: $1.125M at 1.6%, 30yr, monthly	$3,944/month
Annual loan repayment	$47,328
Net annual cash flow	$~1,200
Cash-on-Cash Return	0.16%

Key insight: ABSD adds $300K to the denominator without increasing rental income. This destroys CoC yield. Second-property buys in Singapore are primarily capital appreciation plays, not yield plays. The math only works if you believe the property will appreciate substantially over 5–10 years.

CoC Scenario Comparison (First Property, No ABSD)

District	Price	Monthly Rent	Gross Yield	Est. CoC
D9/10 (CCR)	$2.0M	$5,300	3.2%	~0.4%
D15 (RCR)	$1.5M	$4,200	3.4%	~0.7%
D19 (OCR)	$1.2M	$4,200	4.2%	~0.9%
D22 (OCR)	$1.1M	$4,000	4.4%	~1.1%
D5 (RCR)	$1.0M	$3,800	4.6%	~1.3%

Assumes 75% LTV, 1.6% rate, 30yr tenure, first property (no ABSD), standard renovation $25K–$35K. CoC improves with lower interest rate, higher LTV not available for 2nd property.

What CoC Misses

CoC is a snapshot of immediate cash flow. It does not measure:

Capital appreciation (historically 4–5% p.a. for Singapore private residential)
Equity build-up through principal repayment (each month, part of the loan repayment reduces your debt)
Tax-free capital gains on sale (Singapore has no CGT)
Hedge against inflation (rental income and property value both tend to rise with inflation)

For Singapore property, total return (CoC + capital appreciation + equity build-up) is a more complete measure than CoC alone.

How to Calculate Cash-on-Cash Return: Step-by-Step

Step 1 Add up every dollar of cash deployed. Downpayment (25% for first property, 45–55% for second), BSD, ABSD if applicable, renovation budget, and legal fees. This is your denominator.

Step 2 Project annual gross rental income. Use URA rental data or 99.co/PropertyGuru listings for comparable units. For a 2BR in D19, current market rents are $3,800–$4,500/month depending on furnishing and MRT proximity.

Step 3 Subtract annual loan repayments. This is the full monthly instalment (principal + interest) × 12. Note: for CoC purposes, you include principal repayment as a cash outflow even though it builds equity.

Step 4 Subtract annual property expenses. Property tax, maintenance fees, agent commission (half-month per tenancy, amortised), insurance, and estimated repairs ($1,500–$2,500/yr for a typical condo).

Step 5 Divide net annual cash flow by total cash deployed. Multiply by 100 for percentage. Positive result = cash flow positive investment. Negative = you are topping up monthly but building equity.

When CoC Turns Positive: The Interest Rate Tipping Point

At 1.6% mortgage rate (current market, 2026), most Singapore condo investments are barely cash flow positive or slightly negative. The CoC calculation is extremely sensitive to the interest rate:

Mortgage Rate	Monthly Instalment ($900K, 30yr)	Annual Loan Cost	Net Cash Flow (D19, $3,800 rent)	CoC
1.6% (current SORA-based)	$3,155	$37,860	+$970	0.26%
2.5%	$3,556	$42,672	−$3,841	−1.05%
3.5%	$4,040	$48,480	−$9,649	−2.63%
1.0% (fixed, 2-year promo)	$2,897	$34,764	+$3,876	1.06%

Assumes $1.2M D19 condo, 25% downpayment + BSD + $30K renovation = $367K cash deployed. $3,800/month rent, $2,880/yr property tax, $1,800/yr maintenance.

What Most People Get Wrong About CoC

Using gross yield instead of net cash flow. A 4% gross yield sounds decent. But after loan repayments, property tax, and maintenance, the net CoC is often under 1%. Always model the full cash flow, not just gross rental income.
Forgetting vacancy. Even in a strong rental market, the typical Singapore condo has 2–4 weeks vacancy between tenancies per year. Model 11 months of rental income, not 12, as a conservative baseline.
Not including CPF in the denominator. If you use $150K CPF OA for the downpayment, that CPF is "deployed capital" even though it does not show as cash outflow. For true economic CoC, include CPF used in the denominator.
Comparing CoC across different LTV ratios. A property bought with 10% down (high leverage) looks like it has a much higher CoC than the same property bought with 25% down but the risk profile is completely different. Compare returns using the same LTV assumption.
Ignoring CPF accrued interest on exit. When you eventually sell, you refund CPF + accrued interest at 2.5% p.a. A $150K CPF deployment accrues $4,000/yr in "phantom cost." This reduces your actual return on sale and should be factored into long-term CoC analysis.

Frequently Asked Questions

Is 1% cash-on-cash return worth it for a Singapore condo?

In isolation, 1% CoC sounds poor compared to CPF SA at 4% guaranteed. But Singapore property investors accept low CoC because the real return comes from capital appreciation (historically 4–5% p.a.) and equity build-up through principal repayment. The leveraged total return factoring appreciation on the full property value against your equity is far higher than CoC alone suggests. CoC is a snapshot of cash flow efficiency, not a complete measure of investment return.

How does buying a property under a company affect CoC?

Companies pay 65% ABSD on residential property purchases, which devastates CoC by adding massive upfront cost to the denominator. The only scenario where a company structure makes sense is for commercial property (shophouses, industrial) where ABSD does not apply. For residential condo investment, corporate ownership is virtually never financially viable due to ABSD.

What rental yield do I need to achieve positive CoC at today's rates?

With a 75% LTV loan at 1.6%, you need a gross rental yield of approximately 3.8–4.2% just to break even on CoC (covering loan repayments plus costs). Most OCR condos achieve this. Most CCR (D9/10) condos yield 3.0–3.5% gross meaning negative CoC is structural unless you put in a larger downpayment to reduce the loan amount.

Should I include the BSD in my CoC denominator?

Yes. BSD (and ABSD if applicable) are sunk costs of acquisition real cash paid that cannot be recovered. Including them in the denominator gives you a more conservative and accurate CoC figure. Some investors exclude non-recoverable costs to make CoC look better, but this is misleading for decision-making purposes.