How to Calculate Rental Yield in Singapore Alternatives | Homejourney

To calculate rental yield in Singapore, most investors use a simple formula: annual rent divided by property price, expressed as a percentage. But relying only on this basic rental yield calculation can be misleading, so smart buyers also use alternative metrics like cash-on-cash return, total property ROI in Singapore, and risk-adjusted rental return to get a safer, more realistic picture of performance.[1][3][8]

This cluster guide builds on our main pillar article How to Calculate Rental Yield in Singapore (2025 Guide) | Homejourney by going deeper into how to calculate rental yield in Singapore alternatives—the methods serious investors use in 2025 to avoid overestimating returns and to protect themselves in a volatile market.

What is rental yield – and why basic yield is not enough in Singapore

Rental yield is the percentage return you earn yearly from renting out a property, based on either its purchase price or current market value.[1][2] The standard formulas are:

Gross rental yield = (Annual rental income ÷ Property value) × 100[2]
Net rental yield = (Annual rental income − Annual expenses) ÷ Property value × 100[1][2]

On the ground, for most private condos in city-fringe areas like Boon Keng or Queenstown, you’ll typically see gross rental yields in the 3–4% range based on recent market data, with net yields usually lower after accounting for maintenance, tax and vacancies.[3][5][6] In older HDB towns like Jurong West or Woodlands, yields can be slightly higher, but you must comply with HDB’s Minimum Occupation Period (MOP) and rental rules.

In 2024–2025, with higher interest rates and tighter financing rules, investors who look only at simple rental yield risk underestimating:

Loan interest costs (especially with 3–4% floating rates)
High Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD)
CPF usage implications and accrued interest
Vacancy and ongoing maintenance (e.g. aircon servicing, repainting)

That is why Homejourney advocates using rental yield alternatives—more complete ways of measuring property ROI in Singapore—to give buyers a safer, more transparent view of risk and return.

Core alternatives to basic rental yield in Singapore

1. Cash-on-cash return (your real yearly return on cash invested)

Cash-on-cash return focuses on how much cash you actually earn each year compared to how much cash you actually put in, after including BSD, ABSD, renovation, and other upfront costs.[3][4][8]

Formula:

Cash-on-cash return = Net annual cash flow ÷ Total cash outlay × 100

Where:

Net annual cash flow = Annual rent − (All yearly expenses + Annual loan interest)
Total cash outlay = Downpayment + BSD + ABSD + Legal fees + Renovation + Furnishing + Other upfront costs[3][4]

Example: One-bedder in city fringe

Say you buy a 1-bedroom condo near Potong Pasir MRT for $800,000 and rent it for $2,900/month (a realistic range today for newer projects close to MRT). Based on recent example calculations similar to those used by local guides:[3][4]

Gross annual rent: $2,900 × 12 = $34,800
Estimated annual costs: property tax, condo maintenance, minor repairs, agent fees ≈ $10,000[3][4]
Loan interest (assuming 75% loan at ~3.5%): ≈ $21,000/year in interest portion (first years)

Net annual cash flow ≈ $34,800 − $10,000 − $21,000 = $3,800

Total cash outlay (approximate):

Downpayment (25%): $200,000
BSD (using IRAS tiers): about $18,600
ABSD (if this is a second property for a Singapore Citizen, 20%): $160,000 (based on current ABSD tiers from IRAS)[3]
Legal + renovation + furnishing: say $40,000–$50,000

Total cash outlay ≈ $418,600 to $428,600.

Cash-on-cash return ≈ $3,800 ÷ $420,000 × 100 ≈ 0.9%

On paper, the gross rental yield might look like ~4.4%, but your cash-on-cash return—what actually matters to your bank account—can be below 1% once ABSD and interest are factored in.[3][4] Homejourney strongly recommends every buyer calculate this before committing.

To quickly compare multiple units and projects using this method, you can use Homejourney’s property search tool Property Search together with our bank and mortgage rates resource Bank Rates or Mortgage Rates to cross-check loan scenarios.

2. Total property ROI in Singapore (rental + capital gains − all costs)

Another important alternative is total property ROI, which considers both:

Rental return (net rental yield or cash-on-cash)
Capital gains (price appreciation after selling)

DBS and other local banks highlight that true property returns must include capital gains, maintenance costs, duties and taxes.[8] In Singapore, capital gains can vary a lot by location—compare mature estates like Bishan with newer areas like Punggol or Tengah where long-term transformation is still playing out.

Simple total ROI framework (over holding period):

Total ROI = (Net rental income over holding period + Net sale proceeds − All costs) ÷ Total cash outlay × 100[8]

"All costs" should include:

BSD and ABSD
Legal fees and valuation
Renovation and furnishing
Loan interest paid over the years
Recurring costs (tax, MCST, repairs, Aircon Services and other servicing)
Seller’s Stamp Duty (SSD), if you sell within SSD holding periods (check IRAS and URA guidelines)

For fast-growing areas—such as around upcoming MRT lines in the Jurong Lake District or the Greater Southern Waterfront—capital gains can sometimes outweigh modest rental yields. However, Homejourney always cautions users to verify transformation plans via URA’s Master Plan and official announcements rather than speculative marketing.EdgeProp Property News

3. Risk-adjusted rental return (factoring vacancy and regulatory risk)

Experienced landlords in Singapore rarely look at yield without considering risk. Two big local risks are:

Vacancy risk – supply gluts in certain areas (e.g. many similar one-bedders in the same OCR cluster)
Regulatory risk – changes in ABSD, LTV, or rental rules for HDB flats and private properties

You can approximate a simple risk-adjusted rental return by:

Estimating a realistic occupancy rate (e.g. 10–15% vacancy in areas with heavy competition)
Stress-testing your loan based on higher interest rates
Checking regulatory constraints for your property type (HDB vs condo vs landed)

Example: If gross rent is $4,000/month, but you realistically only rent out 10.5 months a year on average because of lease gaps, your effective annual rent is about $4,000 × 10.5 = $42,000, not $48,000. That alone can reduce your effective rental yield by more than half a percentage point.

On Homejourney, many experienced investors searching in areas like Paya Lebar or Tanjong Pagar will check current project-specific rental volumes and transaction data using platforms like Projects or Projects Directory , and then deliberately assume 1–2 months of vacancy per year when plotting their expected cash flow.

How Singapore regulations change your true rental return

Because of Singapore’s strict housing and financing rules, your effective property ROI can be very different from the simple yield figure in a brochure. Some key rules to factor in: