The Gross vs Net Yield Problem: What Agents Don't Show You
Every property listing quotes gross yield. Gross yield is marketing. Here is the calculation agents leave out, and why the difference is often 1.5–2 percentage points.
The Gross vs Net Yield Problem
Every property portal quotes gross yield. Every agent pitch deck leads with gross yield. Gross yield is marketing.
What Gross Yield Hides
Gross yield = (annual rent / purchase price) × 100. Simple. And nearly useless as an investment metric because it ignores every cost of ownership.
Here is what gets stripped out when you calculate net yield properly:
| Deduction | Amount (on $1M property, $4,000/mth rent) |
|---|---|
| Property tax (non-owner-occ, ~6% of rent) | −$2,880/yr |
| Maintenance fees ($280/mth avg) | −$3,360/yr |
| Vacancy allowance (half a month) | −$2,000/yr |
| Letting fee (one month, annualised) | −$4,000/yr |
| Total deductions | −$12,240/yr |
On a $1M property renting at $4,000/mth:
- Gross yield: 4.8%
- Net yield: 3.34%
That is a 1.46 percentage point gap. Across a $1M purchase, that is $14,600/year — the difference between a working investment and a subsidised tenant.
Want to act on this analysis?
I take a small number of buyers for end-to-end representation. If the numbers work for you, let's talk.
Not financial advice. How the model works →
More from Deal Diary
Why a $1.8M District 15 Condo at $5,200 Rent Nets Just 2.42% — Not the 4% Everyone Quotes
Run the actual math on a realistic District 15 resale condo — $1,800,000 purchase price, $5,200 a month in rent, real maintenance, real property tax — and net yield lands at 2.42%. Not the 3.5-4% figure that gets thrown around in a listing description. That gap isn't rounding ...
Read →
Most "Good Deal" Condos Fail on Yield, Not Price
Ask ten agents what makes a condo a "good deal" and nine will point at the discount to asking price. That's the wrong metric. On most days QuantField runs its buy-box screen, the majority of listings that get rejected aren't rejected because they're overpriced against URA comp...
Read →
Why a 4.19% Yield Still Only Scores 64/100: Inside the QuantField Score's Five Components
Mandarin Gardens cleared our buy box yesterday at a 4.19% net yield — comfortably above the 3.2% floor — and still landed a QuantField Score of just 64/100. That is not a bug. A 99-year lease with 67 years left and a 2,670-unit supply wall from Grand Dunman, Emerald of Katong,...
Read →