Answer
Investment Property Rental Yield in Singapore
Before you buy “for investment,” you need to know what the numbers actually look like after mortgage, taxes, maintenance, vacancy, and agent fees. Most investors overestimate their return because they only look at gross yield.
Answer: Average gross rental yields in Singapore: CCR 2.5–3%, RCR 3–3.5%, OCR 3.5–4.5%. Net yield after all expenses drops to 1.5–2.5%. Formula: (Annual Rent − Expenses) / Total Cost x 100. On a $1,500,000 OCR condo renting at $4,000/month, gross yield is 3.2% and net yield is about 1.7%. With a 75% LTV mortgage at 3.5%, monthly cash flow is negative $1,630 — you pay out of pocket every month and rely on capital appreciation for your real return.
Rental Yield Formulas
| Metric | Formula | What It Tells You |
|---|---|---|
| Gross Yield | (Annual Rent / Purchase Price) x 100 | Quick comparison metric |
| Net Yield | (Annual Rent − Expenses) / Total Cost x 100 | What actually lands in your pocket |
| Cash-on-Cash Return | Annual Net Income / Cash Invested x 100 | Return on your actual cash outlay |
Total cost includes purchase price + stamp duty + legal fees + renovation. Cash invested = down payment + stamp duty + legal fees + renovation.
Average Yields by District (2026)
| Region | Districts | Typical Price (1,000 sqft) | Typical Rent | Gross Yield |
|---|---|---|---|---|
| CCR (Core Central) | D9, D10, D11, D1, D2, D6 | $2,200,000–$4,000,000 | $4,500–$7,000/mo | 2.5–3.0% |
| RCR (Rest of Central) | D3, D4, D5, D7, D8, D12, D14, D15 | $1,400,000–$2,200,000 | $3,500–$5,000/mo | 3.0–3.5% |
| OCR (Outside Central) | D16–D28 | $1,000,000–$1,600,000 | $2,800–$4,200/mo | 3.5–4.5% |
CCR = Orchard, Marina Bay, Bukit Timah, Newton. RCR = Queenstown, Toa Payoh, Geylang, East Coast. OCR = Punggol, Tampines, Jurong, Woodlands. 2026 market estimates.
Gross vs Net Yield — Full Expense Breakdown
Example: $1,500,000 OCR condo, renting at $4,000/month.
| Item | Annual | Monthly |
|---|---|---|
| Gross rental income | $48,000 | $4,000 |
| Maintenance fee | −$6,000 | −$500 |
| Property tax (non-owner-occupied) | −$4,680 | −$390 |
| Income tax on rental (est. 15% marginal) | −$5,598 | −$467 |
| Agent commission (1 month / 2yr lease) | −$2,000 | −$167 |
| Vacancy (2 weeks/year average) | −$1,846 | −$154 |
| Repairs & upkeep | −$1,200 | −$100 |
| Fire insurance | −$300 | −$25 |
| Net rental income | $26,376 | $2,198 |
| Gross yield | 3.2% | |
| Net yield | 1.7% | |
Property tax uses non-owner-occupied rates (10–23% on annual value above $8,000). Income tax at 15% marginal rate after deductible expenses. Actual numbers vary by property and tenant.
Impact of Mortgage on Cash Flow
Most investment properties in Singapore are cash-flow negative when you include the mortgage. Here's what the monthly picture looks like:
| Purchase Price | Monthly Rent | Monthly Expenses | Monthly Mortgage | Cash Flow |
|---|---|---|---|---|
| $1,000,000 | $2,800 | −$1,100 | −$3,753 | −$2,053 |
| $1,500,000 | $4,000 | −$1,803 | −$5,630 | −$3,433 |
| $2,000,000 | $5,000 | −$2,400 | −$7,507 | −$4,907 |
| $3,000,000 | $6,500 | −$3,300 | −$11,260 | −$8,060 |
Mortgage: 75% LTV, 3.5% interest, 25-year tenure. Expenses include maintenance, tax, insurance, vacancy, agent fees. Cash flow = rent − expenses − mortgage.
Break-Even Analysis
How long until your investment property pays for itself? It depends on whether you count just cash flow or include capital appreciation and equity build-up.
| Purchase Price | Cash Invested (25% + costs) | Annual Cash Loss | Break-Even (Cash Flow Only) | Break-Even (with 3% p.a. appreciation) |
|---|---|---|---|---|
| $1,000,000 | $280,000 | −$24,636 | Never (cash-flow negative) | ~5 years |
| $1,500,000 | $420,000 | −$41,196 | Never (cash-flow negative) | ~6 years |
| $2,000,000 | $570,000 | −$58,884 | Never (cash-flow negative) | ~7 years |
Cash invested includes 25% down payment, BSD, legal fees, and estimated renovation. Break-even with appreciation = when total gain (appreciation + equity build-up) exceeds cumulative cash losses. Assumes 3% annual property appreciation, which is the 10-year historical average for Singapore private residential.
What Makes a Good Investment Property
| Factor | What to Look For | Why It Matters |
|---|---|---|
| Location | Near MRT, CBD access, expat areas | Higher demand = lower vacancy, better rent |
| Unit size | 1–2 bedrooms (500–800 sqft) | Higher yield per sqft; larger tenant pool |
| Lease | Freehold or 99-year with 70+ years left | Banks lend more, CPF usable, better resale |
| Maintenance fee | <$500/month for 2-bedroom | High fees eat into net yield |
| Tenant profile | Near international schools, business parks | Expat tenants = higher rent, longer leases |
| Entry price | Below median psf for the area | Lower entry = higher yield, more upside |
Run the full investment numbers
Calculate stamp duty, monthly mortgage, and total cost to see whether the investment works for your budget.
FAQ
What is a good rental yield for investment property in Singapore?
A gross yield of 3.5–4.5% is good for Singapore. OCR (mass market) properties typically hit this range. CCR (prime) yields 2.5–3% because prices are higher relative to rents. Net yield after all expenses is usually 1.5–2.5%. Anything above 4% gross in 2026 is above average.
How do you calculate net rental yield?
Net yield = (Annual Rent − Annual Expenses) / Total Purchase Cost x 100. Total purchase cost includes the property price, stamp duty, legal fees, and renovation. Annual expenses include maintenance, property tax, income tax on rent, agent fees, vacancy loss, and repairs.
What expenses reduce rental yield the most?
Mortgage interest is the biggest cost if you have a loan (at 3.5%, interest alone on a 75% LTV loan eats ~2.6% of the property value per year). After that: property tax (10–23% of annual value), income tax on rental income (at your marginal rate), and maintenance fees ($300–$800/month).
Should I buy CCR or OCR for rental yield?
OCR (Outside Central Region) gives better yield — typically 3.5–4.5% gross vs CCR’s 2.5–3%. But CCR offers higher capital appreciation potential and attracts higher-quality tenants (expats). Most investment advisors suggest OCR for yield-focused strategies and CCR for capital-gain strategies.
How long does it take to break even on an investment property?
With a typical 25% down payment and 3.5% mortgage rate, most investment properties in Singapore take 20–28 years to break even on cash flow alone (rent minus all costs including mortgage). The real return comes from capital appreciation. If the property appreciates 3% per year, total return including equity build-up is much better.
Is rental yield better for new launch or resale condos?
Resale condos generally offer better immediate yield because purchase prices are lower per square foot and you can start renting immediately. New launches have a 3–4 year wait before completion (no rental income during this period), and higher psf prices mean lower yield. However, new launches may appreciate faster.
Related
Last updated Feb 2026. Yields based on 2025\u20132026 market data and URA transaction records. Property tax uses non-owner-occupied rates (IRAS). Mortgage calculations assume 3.5% interest, 25-year tenure. This is not financial advice.