Many of us are aware that property goals differ between buyers, and that owner-occupiers have different requirements from investors. But even among investors, the goals for a property can differ significantly. One of these is the various metrics investors use to calculate their returns. Even if money is not the bottom line for you, these methods can provide an interesting new way to view your unit:

1. Rental Yield

This is one of the most widely recognised metrics, and it’s used by landlords. A high rental yield means stronger cash flow, and quicker returns on your investment. This is also a very simple metric that helps to compare rental performance across different property types, such as a condominium versus an HDB flat. Formula:

• Gross Rental Yield: (Annual Rental Income / Property Purchase Price) × 100%
• Net Rental Yield: (Annual Rental Income – Expenses) / Property Purchase Price × 100%

Example: A condominium is purchased for $1,000,000 and generates an annual rental income of S$36,000....