Property yield, much like a stock or REIT’s dividend yield, plays a factor in giving an investor his desired returns over the long term.
In Singapore, residential property yields have been hovering around the 3-3.5% mark across the island. It’s at the higher end in the Mass Market segment while more compressed in the central districts.
Let’s recap – how is yield calculated? If you remember high school math, the numerator (the number above) is the rental income generated by the property, while the denominator (the number below) is the price paid by the investor for the property.
There are some variations for example
Numerator can be the full rental income before deducting property tax, insurance, maintenance costs etc. It is more accurate to deduct these items. Denominator can be the present market price. For example, the investor bought his house for S$500,000 five years ago and the property …