Current Yield
The "splash" types of properties (the high value properties prices) commonly found in CCR but the most active "ripples" (higher yield percentages) are often found further out towards the edges where the water is shallower and the entry cost is lower.
Current yield for a condo or more commonly referred to as rental yield, is a financial metric that helps investors evaluate the immediate income potential of a real estate investment. It is use to measure potential rental income received in a year over the purchased price paid for the property.
How it works:
Method 1: Gross Rental Yield (%) = Annual Rent divide by Property Price X 100%
Say for example:
Property Purchased Price = S$1,000,000, Annual Rent $36,000 ($3000 per month)
Gross Yield = (S$36,000/S$1,000,000) x 100% = 3.6%. Note that Gross Yield does not account for outgoing expenses unlike
Method 2 - Net Rental Yield(%)
Is a more reflective picture of the actual return by subtracting annual operating expenses from the total rental income:
Typical costs:
- Property taxes
- Maintenance fees (MCST costs)
- Insurance
- Renovation cost
- Agent commissions
District Avg Rental Yield for All Size One Bedroom to Five Bedrooms