Rental yields in Thailand

Treat any single yield figure for Thailand with caution. The firmest is for luxury condominiums in central Bangkok: 5.3% to 5.4% gross. The resort markets have no equivalent record, and the numbers in brochures are projections. What a buyer keeps is the net yield, and the distance between gross and net is wider in Thailand's resorts than most buyers expect.

Gross and net: the two numbers

Gross yield is the annual rent divided by the purchase price. It is the figure quoted in advertising because it is the largest.

Net yield is what remains after the costs of earning the rent, divided by the full cost of buying, including fees and furniture. It is the only figure worth comparing with a bank deposit or a bond.

Neither includes any change in the value of the property, which may be positive or negative.

What the numbers are

Three cautions apply to the table.

First, the Bangkok figure is for luxury stock in the centre, and in the same period rents were flat and capital values were still drifting down. A yield that rises because prices fall is not good news for an existing owner.

Second, the Phuket occupancy range is for hotels. A privately owned condominium or villa competes with those hotels and cannot be assumed to match them, particularly outside a managed programme.

Third, the lack of a yield record for the resorts tells you something. Where you see "7%" or "8%" in a brochure, it is the seller's projection. Agents in Phuket quote 8% to 12% gross, and the careful ones add that the figure is not a guarantee.

Seasonality on the Andaman coast

Resort income arrives unevenly. In the first half of 2026, January and February together brought 43.4% of Phuket's air arrivals. June brought 10.8%. Measured against an annual average of 100, Phuket hotel revenue stood at 196 in January and 41 in June. An annual average makes resort income look steadier than it is.

Hotel trading on the island follows the same pattern: a high season of roughly five months, with occupancy about a third lower and room rates about half in the low period.

For an owner this has three consequences. Most of the year's income is earned between about November and April. Owner use in those months costs far more in lost rent than use in the wet season. And a unit that must cover a loan or a fixed fee every month needs reserves for the months when it earns little. Our seasons tool and the page on climate and seasons show the pattern by coast: the Gulf islands, including Koh Samui, run on a different calendar from Phuket.

What erodes the yield

Vacancy. Even a well-let Bangkok unit is empty between tenancies. A resort unit is empty for much of the low season.

Management. An independent letting agent in Phuket typically takes 15% to 25% of rental revenue. A pooled programme run by a hotel operator keeps about 30% to 40%. Older Phuket hotel-residence contracts were commonly written as a 50:50 split, with commissions and reserves deducted before the owner's half was paid. Check whether the share is taken from gross revenue or from revenue after costs. See hotel-managed and rental pool schemes.

Common-area fee. The common-area fee is charged per square metre every month, let or empty. Branded and resort buildings with extensive facilities charge more.

Tax. Rent paid from Thailand to a non-resident owner is subject to 15% withholding. A resident pays progressive rates after a 30% standard deduction. See rental income and tax.

Furniture and wear. Holiday lets consume furniture, linen and air conditioning quickly. Many programmes require a reserve.

Legal limits on letting. Stays of under 30 days need a hotel licence. A projection built on nightly lets in a building that cannot lawfully offer them is not a projection you can rely on. See short-term rental rules.

An illustration

The table below is arithmetic, not market data. Every input is an assumption chosen to show how the deductions stack up on a resort condominium bought for THB 10,000,000 by a non-resident.

The advertised 7% has become about 2.3% of the price, before furniture, insurance and purchase costs. Change any assumption and the answer moves, which is the point: ask for the real inputs and run them through the rental yield calculator.

Why to distrust headline figures

• They are usually gross. Costs are left out or mentioned in a footnote.
• They assume the high season lasts all year. A January rate multiplied by 365 nights is not a forecast.
• They may assume lets the law does not allow.
• They are sometimes backed by a rental guarantee that runs for a fixed term and may be reflected in the price you pay. A guarantee tells you what the developer will pay, not what the market will.
• They ignore supply. Phuket had a future pipeline of 28,211 condominium units in mid 2026, and many foreign buyers were purchasing on projected rental returns without visiting. That model will not hold if the returns are not delivered. Koh Samui shows the mechanism: nightly rates fell 11% in a year in which rental villa supply rose 34%.

How to test a yield claim

1. Ask whether the figure is gross or net, and net of what.
2. Ask for monthly occupancy and average rate for the last two or three years in the same building, from the operator's records.
3. Identify every deduction between guest payment and owner payment.
4. Confirm that the letting model is lawful for that building.
5. Recalculate on the total cost of purchase, using property taxes and buying costs.
6. Run a weak year: lower occupancy, lower rate, a currency move against you.

Rental income from Thai property is real, and in the right building it is a useful return. It is rarely the figure on the brochure. We do not forecast yields or promise income. Take independent financial advice before you invest.