Condo Rental Investment: How to Calculate Real Returns — Rental Yield & Cash-on-Cash
April 11, 2026
Why Invest in Rental Condos?
Condo rental investment is one of Thailand's most popular passive income strategies because:
- Monthly rental income
- Long-term property appreciation (Capital Gain)
- Low down payment, bank financing available
- Easier to manage than most businesses
Return Calculation Formulas
1. Gross Rental Yield
Formula: (Annual Rent ÷ Purchase Price) × 100
Example: Buy condo for 2,500,000 THB, rent at 12,000 THB/month
Gross Yield = (12,000 × 12) ÷ 2,500,000 × 100 = 5.76%
2. Net Rental Yield
Formula: [(Annual Rent - Annual Expenses) ÷ Purchase Price] × 100
Expenses to deduct:
- Common area fees: ~2,000 THB/month = 24,000/year
- Maintenance: ~5,000/year
- Agent fee (if any): 1 month = 12,000/year
- Insurance: ~3,000/year
- Income tax: ~10,000/year (depends on total income)
- Vacancy: estimate 1 month/year = 12,000
Total expenses = 66,000 THB/year
Net Yield = (144,000 - 66,000) ÷ 2,500,000 × 100 = 3.12%
3. Cash-on-Cash Return
Formula: (Annual Net Profit ÷ Actual Cash Invested) × 100
If 20% down = 500,000 + transfer fees 75,000 = 575,000 THB cash invested
⚠️ Reality check: If still paying mortgage, cash flow may be negative! But equity grows through principal reduction + appreciation.
Best Rental Yield Locations (2026)
| Location | Avg. Price | Avg. Rent | Gross Yield |
|---|---|---|---|
| On Nut-Bearing | 2.0-3.0M THB | 10,000-14,000 | 5.5-6.5% |
| Ramkhamhaeng | 1.5-2.5M THB | 8,000-12,000 | 5.0-6.0% |
| Bang Saen-Sri Racha | 1.2-2.0M THB | 7,000-10,000 | 5.5-7.0% |
| Nimman (Chiang Mai) | 2.0-3.5M THB | 12,000-18,000 | 5.5-6.5% |
| Central Pattaya | 1.5-3.0M THB | 10,000-15,000 | 6.0-7.5% |
Tips to Maximize Returns
- Choose small 1-bedroom units (25-35 sqm) — higher yield than larger units
- Furnish completely — commands 20-30% higher rent
- Short-term/Airbnb rental — 2-3x higher yield (check building rules)
- Buy at pre-sale — 10-20% below market price
- Higher floors with views — 1,000-3,000 THB/month premium
Risk Factors
- Don't look at Gross Yield alone — always calculate net expenses
- Vacancy may last longer than expected — keep 6 months' reserves
- Condos 10+ years old face rising common fees + repair costs
- Oversupply in some areas — check total unit count in the vicinity