Deal guide
Why Rental Yield Alone Isn't Enough
A high rental yield can make an apartment look attractive, but yield is only one part of the investment. If the property is difficult to resell, expensive to maintain or dependent on a narrow tenant group, the headline return may hide a weak exit.
01 · Calculate net yield first
Start with realistic rent, then subtract vacancy, management, maintenance, repairs, service fees, taxes where applicable, furniture replacement and financing costs. Headline rent divided by purchase price is not the same as the investor's real return.
02 · Ask who will buy it later
A strong investment should have a believable resale audience. Consider total ticket price, layout, building quality, location and whether families, owner-occupiers or other investors would see the property as useful.
03 · Measure liquidity, not only value
A property may be valuable but slow to sell. Very large units, unusual layouts, hotel-style products or highly specialised apartments can have fewer buyers. The time required to exit matters when capital is needed elsewhere.
04 · Stress-test the rent
Ask what happens if rent falls, vacancy lasts longer, management becomes more expensive or the target tenant group weakens. An investment that works only under the best assumptions has little margin for error.
05 · Check future competition
New supply can change both rent and resale demand. Look at nearby construction, similar projects, building age and how easy it would be for a future buyer or tenant to choose a newer alternative.
06 · Balance income and exit
There is no single correct mix. The useful comparison is net income today versus resale flexibility tomorrow. Sometimes accepting a slightly lower yield can buy a much broader future buyer pool.
For general information only. This guide is not a substitute for legal, tax or investment advice. Verify the facts for your particular transaction and consult a qualified professional when necessary.