Investing for Rental Income: How to Calculate Real Condo Yields in Thailand
Gross versus net yield, the costs most investors forget, Thailand's short-term rental rules, and what tenants in Bangkok and Chonburi actually want.
“8% guaranteed rental return!” You’ve probably seen the adverts. Before you get excited, it’s worth learning to calculate yield yourself. The difference between the headline number and what actually lands in your account can be big.
Gross yield vs net yield
Gross yield is the simple number:
Gross yield = Annual rent ÷ Purchase price
Net yield is the number that matters:
Net yield = (Annual rent − running costs − vacancy) ÷ Total cost of purchase
A worked example (illustrative only)
A 30 m² one-bedroom near a BTS station, bought for THB 4,200,000, rented at THB 18,000/month on a one-year lease.
Gross yield: 216,000 ÷ 4,200,000 = 5.1%
Now the real costs:
| Cost | Assumption | THB / year |
|---|---|---|
| Common area fee | 30 m² × 50 × 12 | 18,000 |
| Vacancy | 1 month between tenants | 18,000 |
| Agent commission | 1 month’s rent per 1-year lease | 18,000 |
| Repairs & upkeep | Air-con service, minor fixes | 10,000 |
| Total costs | 64,000 |
Net income: 216,000 − 64,000 = 152,000 Total purchase cost (price + approx. 150,000 in fees and furnishing): 4,350,000
Net yield: 152,000 ÷ 4,350,000 = ≈ 3.5%, before income tax.
That’s still a solid return. But it’s quite different from the headline figure, and it’s the figure you should plan around.
What about “guaranteed rental returns”?
Some developers offer guaranteed returns for a set number of years. Read the fine print:
- Is the guarantee built into the price you’re paying?
- Who pays if the operator can’t deliver?
- What happens when the guarantee ends, and what’s the realistic market rent then?
A guarantee is only as strong as the company behind it.
Short-term rentals: know the rules
Renting out a condo by the night or week is restricted under Thailand’s Hotel Act. Short stays generally require a hotel licence, and many condo buildings ban them in their regulations. Owners can face fines, and neighbours do complain.
Our advice: build your numbers around legitimate leases (typically 6–12 months or longer). If short-term rental income is part of your plan, get legal advice first.
What tenants actually want
From our experience in Bangkok and Chonburi:
- 🚆 Walking distance to BTS/MRT. This is the number one factor in Bangkok.
- 📐 A practical layout. A well-designed 30 m² unit can beat a badly designed 35 m² one.
- 🛋️ Fully furnished and move-in ready, with decent appliances and good blackout curtains.
- 🌐 Fast internet and a usable work-from-home corner.
- 🏢 Well-managed buildings with good security and a responsive juristic office.
- 🏭 In Sriracha and the EEC: proximity to industrial estates and corporate lease standards.
Yield vs growth: pick your strategy
- Yield-focused: smaller, well-located units in established areas with deep tenant pools.
- Growth-focused: emerging areas near new infrastructure, where you accept lower yields today for potential appreciation.
- Balanced: good buildings, near transit, at a fair price. This is usually where we steer first-time investors.
Let us run your numbers
Send us a unit you’re considering, or your budget and goals, and we’ll put together an honest rental estimate with real costs. If the numbers don’t work, we’ll tell you.
Example figures are for illustration only and are not financial or tax advice. Rental income earned in Thailand is subject to Thai tax. Consult a qualified adviser about your situation.
