How to Calculate ROI on Phuket Property?

Step 1: Gross Yield Calculation

Gross yield is the starting point — rental income before any expenses:

Formula: Gross Yield (%) = (Annual Rental Income ÷ Purchase Price) × 100

Real Example — 1-bedroom condo in Kamala, 48 sqm:

Item	Value
Purchase price	$185,000
Average nightly rate	$110 (high season) / $75 (low season)
Occupied nights/year	260 (71% occupancy)
Annual gross rental income	$24,050
Gross Yield	13.0%

Note: 71% occupancy assumes a hotel-licensed building with professional management. Gross rental income at nightly rates can look impressive — but expenses bring this down considerably.

Step 2: Net Yield Calculation

Net yield is what you actually receive after operating costs:

Expense Category	Amount	% of Gross
Management fee (18% of gross)	$4,329	18%
CAM fee (70 THB/sqm/month × 48 sqm × 12)	$696	2.9%
Building insurance	$300	1.2%
Maintenance reserve (1% of value)	$1,850	7.7%
Vacancy allowance (built into 71% occupancy)	Included	—
Total operating costs	$7,175	29.8%
Net annual income	$16,875	—
Net Yield	9.1%	—

This example shows a net yield of 9.1% on a $185,000 investment — exceptionally strong by global standards. Lower-end projects or less active management will deliver 5.5–7% net.

Step 3: Total Return (ROI Including Capital Growth)

For property investments, ROI should capture both income and capital growth:

Total Annual ROI = Net Yield + Capital Appreciation Rate

Return Component	Annual	5-Year
Net rental income	$16,875 (9.1%)	$84,375
Capital appreciation (8%)	$14,800	$85,954
Total return	$31,675 (17.1%)	$170,329 (92%)

Over 5 years, the $185,000 investment delivers approximately $170,000 in combined income and capital gain — nearly doubling your money.

Step 4: Accounting for Purchase Costs

First-year ROI must factor in one-time purchase costs:

Cost	Amount
Transfer fee (2% of assessed value)	~$1,850
Specific Business Tax (if applicable, 3.3%)	~$3,100
Legal fees (lawyer + contracts)	$800–$1,500
Furniture and fit-out (if unfurnished)	$5,000–$15,000
Total one-time costs	~$11,000–$22,000

Add these costs to your effective acquisition price when calculating year-1 ROI. A $185,000 condo with $18,000 in costs has an effective cost base of $203,000 — reducing first-year ROI slightly. From year 2 onward, there are no purchase costs, so yield on cost improves annually.

Step 5: Cash-on-Cash Return (If Staged Payments)

For off-plan purchases with staged payment schedules, calculate cash-on-cash return:

Scenario: $185,000 condo, paid in stages:

• Reservation: $5,000
• Down payment at SPA (30%): $55,500
• Construction milestones (40%): $74,000
• Final payment at transfer (30%): $55,500

During the 3-year construction period, your cash deployed grows from $5,000 to $185,000. The capital appreciation gain (say 30% = $55,500) is earned on the full $185,000 value but with staged cash outflow — creating amplified cash-on-cash returns in the construction phase.

Realistic ROI Ranges by Property Type

Property Type	Gross Yield	Net Yield	Annual Appreciation	Total ROI
Bang Tao condo (hotel program)	8–12%	6–9%	8–12%	14–21%
Kamala condo (managed)	7–10%	5.5–8%	7–10%	12–18%
Rawai condo (long-term rental)	6–8%	5–6.5%	6–8%	11–14.5%
Villa leasehold (managed)	5–8%	4–6.5%	5–8%	9–14.5%

What This Means for Buyers

Gross yield figures from developer brochures are often the most optimistic scenario — 100% occupancy at peak season rates. Always model from net yield with realistic occupancy (65–80% for a well-managed project).

The strongest ROI cases in Phuket combine solid net yield (7–9%) with capital appreciation in a growth area. Neither metric alone tells the full story — total return is what counts.

MORE Group provides independent ROI modelling for every project we recommend, using real market data rather than developer projections.

Frequently Asked Questions

What is a good net yield for a Phuket condo? +

6-8% net is excellent. 5-6% is solid. Below 5% suggests the project is either overpriced or poorly managed. Best-in-class hotel-program condos can achieve 8-10% net.

What expenses should I include in my Phuket property ROI calculation? +

Management fee (15-20% of gross), CAM fee (40-100 THB/sqm/month), building insurance (~$300/year), maintenance reserve (1% of property value), and a realistic vacancy allowance.

How do I calculate capital appreciation in Phuket? +

Use the area's historical appreciation rate as a baseline (5-8% per year for prime areas) and add it to your net yield for total annual ROI. Off-plan purchases add 25-40% appreciation during construction.

Is the ROI on Phuket property better than the stock market? +

On a total return basis (income + appreciation), prime Phuket property has delivered 12-18% annually in recent years — comparable to or better than equity markets, with lower volatility and a physical asset backing.

Does property management fee affect ROI significantly? +

Yes. The difference between 15% and 20% management fee on a $24,000 gross income is $1,200/year — roughly 0.65% of net yield. Choosing a professional manager over a cheap operator typically more than compensates through higher occupancy.