How to Calculate Real Rental Yield in Phuket: 3 Scenarios
Gross vs net yield, management fees, vacancy, taxes. Three real calculations for studio, 1BR and villa in different areas.
Gross Yield vs Net Yield: The Critical Difference
When a developer tells you "7% yield", they almost always mean gross yield — revenue before expenses. Your actual return is the net yield, which accounts for management fees, maintenance, vacancy, and taxes. The gap between gross and net is typically 25–40%. Here is how to calculate both correctly.
The Formula
Gross yield = (annual rental income / purchase price) × 100. Net yield = ((annual rental income − all expenses) / purchase price) × 100. Key expenses: management fee (30–40% of gross for hotel programmes, 10–15% for independent agents), annual maintenance and sinking fund (฿15,000–25,000 typically), furniture replacement reserve (฿5,000–10,000/year), insurance (฿3,000–8,000/year), vacancy (10–25% depending on management type).
Scenario 1: Studio in Bang Tao — Hotel Programme
Purchase price: ฿4,000,000. Hotel programme gross yield: 9% = ฿360,000/year. Management fee 35%: −฿126,000. Annual maintenance: −฿18,000. Insurance: −฿5,000. Net annual income: ฿211,000. Net yield: 5.28%. Payback period: 19 years. Note: this does not include capital appreciation (estimated +฿600,000–800,000 by completion for off-plan purchase).
Scenario 2: 1 Bedroom in Rawai — Independent Airbnb
Purchase price: ฿5,500,000. Average rate: ฿2,200/night. Occupancy: 65% (237 nights/year). Gross income: ฿521,400. Agency fee 12%: −฿62,568. Cleaning & utilities: −฿45,000. Maintenance: −฿20,000. Sinking fund: −฿12,000. Insurance: −฿6,000. Net annual income: ฿375,832. Net yield: 6.83%. Payback: 15 years.
Scenario 3: Pool Villa in Nai Harn — Premium Short-Term Rental
Purchase price: ฿15,000,000. Average rate: ฿8,500/night. Occupancy: 55% (201 nights/year). Gross income: ฿1,708,500. Management fee 15%: −฿256,275. Pool maintenance: −฿60,000. Cleaning & utilities: −฿120,000. Maintenance: −฿50,000. Insurance: −฿15,000. Net annual income: ฿1,207,225. Net yield: 8.05%. Payback: 12.4 years.
The Off-Plan Multiplier
All three scenarios above assume current market prices. If you buy off-plan (during construction), add the capital appreciation component: typically 20–30% price increase between purchase and handover over 2–3 years. For the Studio scenario, that is ฿800,000–1,200,000 additional return on a ฿4M investment — equivalent to an extra 20–30% ROI on top of rental yield.
What to Ask the Developer
Always ask for audited rental pool statements for existing units. Request actual occupancy rates (not projections). Clarify whether the "guaranteed yield" covers the full purchase price or just the base price excluding furniture. Ask what happens to the guarantee if the hotel operator changes. ThaiRealty.PRO runs real yield projections for every project using actual historical data from comparable units.