In this guide
- Gross Rental Yield
- Net Rental Yield
- Cash-on-Cash Return
- Total ROI over holding period
Gross Rental Yield
The simplest metric: (annual rent / property price) × 100. A 6%+ gross yield is considered good in the Philippines. Useful for quick comparisons but ignores expenses.
Net Rental Yield
((annual rent − annual expenses) / property price) × 100. Subtract HOA, property tax, insurance, and maintenance. This is a more realistic indicator of profitability.
Cash-on-Cash Return
(annual cash flow / total cash invested) × 100. Cash flow = rent − expenses − mortgage payment. Cash invested = down payment + closing costs. This shows return on actual money spent.
Total ROI over holding period
Combines rental cash flow + property appreciation + equity buildup. Use this site's ROI calculator to model different scenarios over 1–20 year holding periods.
Quick Tips
- ★ Always use multiple metrics — no single number tells the full story.
- ★ Factor in vacancy rate (typically 5–10% in Metro Manila).
- ★ Don't forget income tax on rental income — 15–25% depending on bracket.
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