Start with the actual cash requirement
Gross yield divides annual rent by purchase price. It is useful as a quick screen, but it does not show what the investor pays to acquire, operate and exit the property. Begin with the total cash requirement: price, registration, brokerage, valuation, financing, conveyancing, furnishing, repair and any amount due before the unit can earn income.
Build a realistic income line
Use registered rental evidence and genuinely comparable current competition. Adjust for building, unit size, floor, view, condition, furnishing, parking and tenancy terms. Do not automatically use the highest advertised rent.
Allow for vacancy, leasing commission, incentives, payment collection and the time needed to prepare the unit between tenants. If short-term letting is considered, separately model licence, operator, cleaning, platform, furnishing replacement and seasonal occupancy.
Deduct recurring and irregular cost
The net model should include:
- service and community charges;
- management, maintenance and insurance;
- cooling, utilities or owner-paid services;
- furnishing and appliance replacement;
- financing and currency exposure where relevant;
- a reserve for unplanned work.
Review the actual building record where available. A neighbourhood average cannot replace the unit’s service charge or maintenance condition.
Compare more than one scenario
Use at least a base and downside case. Reduce rent, increase vacancy and cost, and extend the expected resale period in the downside case. If the investment only works at the highest rent with uninterrupted occupancy and no repair, the forecast is fragile.
Separate income return from capital growth. Future sale price is uncertain; model it as a scenario rather than a promised component of return.
Include liquidity and exit cost
A high running yield may come with limited buyer demand, heavy competing supply or a building problem. Review transaction frequency, unit standardisation, future handovers, buyer financeability and the likely cost and time to resell. Include selling commission, settlement of finance, required certificates and transfer-related expenses.
Compare like with like
When ranking opportunities, use the same assumptions for holding period, occupancy, management and financing. Record the date and source for every input. Compare net cash return, downside resilience and liquidity—not only the advertised percentage.
Royal Abraj Group’s role is to build a transparent property-level model and match it to the client’s funding, time horizon and risk tolerance. Returns are not guaranteed. Official market evidence, current charges and transaction-specific professional advice should be refreshed before commitment.