# Net yield

Source: https://www.thailandpropertyinvestor.com/glossary/net-yield

**Definition:** Net yield is annual rental income after all running costs, divided by the total cost of acquiring the property and expressed as a percentage. It shows what an investment property actually earns for its owner.

Start with the rent actually collected in a year, allowing for empty periods. Deduct:

- common-area fees and any sinking fund top-up
- letting and management fees, or the operator's share in a rental programme
- utilities and internet where the owner pays them
- insurance, repairs and periodic replacement of furniture and air conditioning
- land and building tax
- income tax on the rent, including the 15% withheld from rent paid to a non-resident owner

Divide the result by what the property really cost: the price plus transfer fees, legal fees and furnishing.

As an illustration, a unit that cost THB 10.4 million including buying costs and collects THB 600,000 in rent, with THB 180,000 of annual costs and tax, has a net yield of about 4%. The same unit would be advertised at a gross yield of 6%.

Net yield is still not the whole return. It ignores changes in the property's value and in the exchange rate between the baht and your home currency. See [rental yields in Thailand](https://www.thailandpropertyinvestor.com/guides/rental-yields-in-thailand) and the [rental yield calculator](https://www.thailandpropertyinvestor.com/tools/rental-yield-calculator).