How to calculate Phuket rental yield

Establish which return is being quoted

A presentation may show gross revenue, income after an operator’s fee or a payment under a separate programme. These are different measures. Ask for the period, included costs and investment base behind the percentage. Without all three, two return figures are not comparable.

Gross yield relates rental revenue to the chosen investment base. Net operating yield deducts operating costs. The owner’s cash flow also depends on taxes, finance, capital expenditure and other obligations. Check exactly what an author includes in the word “net”.

Build a full-year calendar

For each month, record available rental days, occupied days and the average realised rate. Personal stays and maintenance periods cannot simultaneously be rental nights. When an operator forecasts occupancy, ask whether it is measured against calendar days or only available days.

One strong month does not describe a year. Request comparable-property evidence with location, size, condition, access to amenities and observation period. An advertised nightly price is not evidence that guests paid that rate with the assumed frequency.

A worked example, not a market forecast

The following hypothetical model has 360 available days. The inputs are chosen to demonstrate arithmetic. They are not market statistics, an IBG Property forecast or an offer for a particular development. The remaining days of the year earn nothing in this example.

Model period	Available days	Occupied days	Rate per occupied night	Revenue
Period A	120	90	THB 3,000	THB 270,000
Period B	120	66	THB 2,200	THB 145,200
Period C	120	42	THB 1,600	THB 67,200
Model year	360	198	Varies by period	THB 482,400

With an all-in investment of THB 5,500,000, gross yield is 482,400 / 5,500,000 × 100, or approximately 8.77%. That is not yet the return on money retained by the owner.

Assume management and distribution together cost 25% of revenue, with other annual operating costs of THB 90,000. The remaining operating income is THB 271,800, or approximately 4.94% of the investment. Owner taxes, loan interest, major refurbishment and disposal costs are excluded. Both the fee and expense assumptions are hypothetical too.

Ask who pays each expense

Separate variable costs from fixed commitments. The former change with bookings; the latter can remain when the apartment is empty. Avoid counting a platform fee twice if it is already included in the operator’s fee.

Cost group	Questions to ask
Guest acquisition	Operator and platform fees, discounts, refunds and payment costs
Guest servicing	Cleaning, linen, consumables and utilities
Ownership	Common-area charges, insurance, internet and recurring payments
Property condition	Repairs, appliance and furniture replacement, refurbishment reserve

For every item, establish whether the guest, operator or owner pays, what evidence supports the amount and when statements are issued. Review personal-use restrictions and termination terms in the management agreement. Confirm that the proposed rental use is legally permitted for the particular property.

Test lower occupancy

Reduce occupied nights in the same example by 20% while keeping rates unchanged. Revenue becomes THB 385,920. After the hypothetical 25% fee and THB 90,000 fixed costs, operating income is THB 199,440. That is approximately 3.63% of the THB 5,500,000 investment before the exclusions listed above.

This is a sensitivity test, not a prediction of falling demand. Test lower rates, an additional repair and personal stays during expensive dates separately. A base case should not quietly combine every optimistic assumption.

A home for you and a rental property

If you want to spend several months in Phuket, put them into the calendar first. Personal use is not cash rental income, although its value to your life may be the main reason to buy. A property with a lower projected yield may fit that purpose better.

Do not choose solely by an advertised percentage. Location, layout, construction quality, ownership and ease of management matter alongside the spreadsheet. Our foreign buyer guide explains the wider purchase checks.

Forecasts, guarantees and capital growth

A rental forecast is not the same as a contractual payment obligation. If a guarantee is offered, examine who must pay, the duration, conditions, exclusions and remedies for non-performance. The word in a brochure does not replace counterparty assessment and legal advice.

A resale gain is not rental income. Model it separately with selling costs and time to exit. An unrealised increase in an estimated value cannot be added to cash received and described as a regular payout.

What to request before buying

Ask for the input spreadsheet, not only its headline percentage. It should show acquisition costs, the calendar, rates, occupancy, fees, fixed costs and exclusions. Label every figure as an operating statement, supplier quote or assumption. Another adviser should be able to reproduce the arithmetic.

That turns “What is the yield in Phuket?” into an answerable question: which property, which period, which costs and what risk can you accept? Start there before comparing development brochures.