What Affects Rental Yield in Phuket Most? 7 Key Factors
This guide answers one of the most common questions from foreign buyers in Phuket’s property market: What Affects Rental Yield in Phuket Most? 7 Key Factors.
Direct Answer
Management quality, not location, is the largest single variable in Phuket rental yield. Two identical units in the same building, let through different managers, routinely differ by several percentage points of net. Location sets the ceiling; management decides how close you get to it.
The factors, in order of how much they move the number
1. Management. A competent manager keeps occupancy high, prices dynamically by season, maintains the unit so reviews stay strong, and controls costs per changeover. An indifferent one lists the unit at a fixed rate and waits. The gap between them is larger than the gap between two decent locations.
2. Whether the building can let short-term at all. Stays under 30 days are hotel business under the Hotel Act absent a licence, and house rules bind independently. A building that cannot let nightly is a long-stay asset, which is a different and lower-yielding but steadier business. This is binary and it should be established before anything else.
3. Unit size relative to its market. Below roughly 35 sqm, a unit serves the short-stay market only, because long-stay tenants want more. Above it, you have two demand pools and a fallback. Very large units have the opposite problem: a smaller pool of guests and more competition from villas.
4. Distance to the beach, for short lets. It is the primary search filter, so it drives both rate and visibility. It matters far less for long-stay letting, where residents weigh value, space and access to work and schools.
5. Seasonality and how honestly you model it. Phuket’s high season runs roughly November to April. An annual average occupancy figure conceals months that may be close to empty, and any projection quoting a single number across twelve months is not a projection.
Where the gross-to-net gap comes from
| Deduction | Typical scale |
|---|---|
| Management | 15-20% private; 20-35% pooled hotel programme |
| Platform commission | Where not already netted from the gross figure |
| Cleaning and laundry per changeover | Fixed per turnover, so it hurts small units most |
| Utilities between guests | Air conditioning running in an empty unit |
| CAM and sinking fund | Higher per sqm in amenity-heavy buildings |
| Vacancy | The line most projections omit entirely |
| Furniture and refresh | A let unit needs replacing on a cycle, not never |
Turnover cost is the effect owners least anticipate. Cleaning a 30 sqm studio costs close to what cleaning a 50 sqm one-bedroom costs, so on a small, low-priced unit that fixed cost consumes a much larger share of revenue. It is why the highest gross yields in Phuket, which are found at the bottom of the market, frequently produce unremarkable net yields.
What to ask before you accept any yield figure
- What occupancy assumption is this based on, month by month?
- Is it gross or net, and if net, which deductions are included?
- Can I see a twelve-month statement from a comparable unit in this building?
- Who manages it, at what fee, and what does the fee cover?
- Is the distribution pooled across the building or specific to my unit?
- Does this building hold a hotel licence, and what do the house rules say?
A manager who can answer all six is probably worth hiring. One who cannot answer the first has given you a marketing number, and the appropriate response is to build your own model at an occupancy you would be comfortable defending.
Frequently Asked Questions
Management quality. Two identical units in the same building, let through different managers, routinely differ by several percentage points of net. Location sets the ceiling; management decides how close you get to it.
Whether the building can lawfully let short-term. Stays under 30 days are hotel business under the Thai Hotel Act absent a hotel licence, and house rules bind independently. If nightly letting is not available, you own a long-stay asset at long-stay yields.
A great deal, at one threshold. Below roughly 35 square metres a unit serves the short-stay market only; above it you have two demand pools and a fallback. That optionality removes most of the vacancy risk from a model.
Because turnover costs are largely fixed per changeover regardless of booking value. Cleaning, linen, the platform commission event and the manager's time cost roughly the same on a studio as on a one-bedroom, while the revenue is a fraction.
The occupancy assumption month by month, whether the figure is gross or net and which deductions are included, twelve months of actual data from comparable units in the same building, and whether distribution is pooled or unit-specific.
Management decides more than location
We ask every manager the same six questions and send you the answers, including the ones who cannot answer them.
Olga
Head of Rentals, MORE Group
Runs the rental side at MORE Group: occupancy and rate data from managed Phuket units, management-company selection, and what an owner actually nets after costs.
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