Rental yields in Phuket: how to work out gross and net
Updated · ZODIAC Co., Ltd.
Rental yield is annual rent divided by the price you pay. Gross yield uses rent before costs; net yield deducts common fees, management, maintenance, tax and vacancy, and is the number that matters. Phuket yields vary widely by location, property type, season and whether letting is short-term or long-term, so any single headline figure, and any guarantee, deserves scrutiny.
Why we do not quote a single yield
Advertised yields for Phuket range widely, and they are usually gross figures based on optimistic occupancy. Real results depend on the unit, the building, how it is let and managed, and costs that differ from one owner to the next. We do not promise yields and this guide is not investment advice. Instead it explains how to test any figure you are given, so that you can compare properties on the same basis.
Returns on property also include capital growth or loss, currency movements and transaction costs on entry and exit, which are not part of the yield figure at all.
Gross yield
Gross yield is the annual rent divided by the purchase price, expressed as a percentage. If a unit bought for THB 6,000,000 lets for THB 30,000 a month all year, gross rent is THB 360,000 and gross yield is 6%. The example is illustrative, not a market figure.
Gross yield is useful only as a first filter. It ignores the fact that the unit is unlikely to be let every month, that the building charges fees, and that tax is due on rental income.
From gross to net: the costs to deduct
To reach net yield, deduct everything you would pay as a landlord over a year. For a long-term let, the main items are straightforward; for holiday lets, add cleaning, laundry, utilities, booking platform commission and a much larger management fee.
- Vacancy: months without a tenant, or unsold nights for holiday lets.
- Common area fees charged by the building's juristic person.
- Management or agency fees, typically a percentage of rent.
- Maintenance and replacement of furniture and air-conditioning.
- Land and building tax and insurance.
- Income tax on rent in Thailand, after the 30% standard deduction or actual expenses.
- Utilities and internet where included in the rent.
A worked net yield example
Continuing the illustrative THB 6,000,000 unit: assume ten months let at THB 30,000, giving THB 300,000. Deduct common area fees of THB 36,000, management at 10% of rent, THB 30,000, and maintenance of THB 20,000. Land and building tax and insurance add perhaps THB 5,000. That leaves THB 209,000 before income tax. With the 30% standard deduction, taxable rent is THB 210,000; the tax due depends on your total Thai income and filing position. Before tax, net yield is about 3.5%, compared with a 6% gross figure on the same unit.
Every number here is an assumption to be replaced with real data: the building's actual fee schedule, a written management quote and rental evidence for comparable units. The point of the exercise is the gap between gross and net, which is often larger than buyers expect.
Short-term versus long-term letting
Nightly rates in Phuket's high season are attractive and are the basis of many brochure yields. But renting a condominium for periods under 30 days is a hotel business under the Hotel Act unless the building holds a hotel licence, and most condominiums do not. Penalties include imprisonment of up to one year, fines of up to THB 20,000 and daily fines. Condominium regulations can also prohibit short stays. A proposed reform of the hotel rules was accepted in principle by the House of Representatives in July 2026, but it is not yet law.
In practice this means a yield estimate for a normal condominium should be based on monthly or longer tenancies, unless the unit is in a licensed hotel or serviced-residence programme. Villas and houses have somewhat different rules, discussed in our rental licensing guide.
Villas and yield
Villa yields follow the same arithmetic with different inputs. Villas can be let nightly under the small-accommodation exemption if they have no more than eight rooms and 30 guests and are notified to the local registrar, which opens up holiday-rental income that most condominiums cannot lawfully access. Against that, costs are higher: pool and garden maintenance, staff, estate service charges, furnishing at a higher standard and a larger management fee for holiday lets.
A leasehold villa also has a finite life. When you calculate returns on a 30-year lease, part of each year's rental income is in effect repaying your purchase price, because the lease will be worth nothing at the end of its term. A realistic comparison with a freehold condominium should allow for this decline in value, not only the annual yield.
Seasonality
Phuket's tourism is seasonal, with the dry high season roughly from November to April and a quieter wet season. Long-term tenancies smooth this out; holiday letting does not. When you see an average nightly rate or occupancy figure, ask which months it covers and whether it is for the specific building or an area average.
For monthly lets, the high season is also when demand from seasonal visitors peaks, so owners who use the property themselves in the European or Australian winter give up the most valuable months. Factor your own use into any yield estimate honestly.
Rental guarantees and hotel programmes
Many new projects offer guaranteed returns for a fixed period, or a share of revenue from a hotel operator's rental pool. A guarantee is a contractual promise by the developer or operator, and its value depends on their solvency and on the contract. Often the guarantee is funded from the purchase price, so a unit with a guarantee may cost more than a comparable unit without one. After the guarantee ends, income depends on actual performance. Ask for the operator's historic results in comparable buildings, the fee structure, owner-use restrictions and exit terms.
What drives rental demand in Phuket
Demand comes from tourists, seasonal visitors, long-stay foreigners and families relocating for schools and lifestyle. Location matters: proximity to beaches, international schools, the airport and daily amenities affects both occupancy and rate. In our catalogue, condominium projects within 500 metres of a beach have a median of about THB 180,000 per square metre, against about THB 128,000 for projects more than 1.5 km away. Higher prices per square metre need higher rents to produce the same yield, so a closer location is not automatically a better yield.
Supply matters too. With 102 projects in our catalogue under construction and 70 due for completion in 2027, new competition for tenants in some areas is a factor to consider.
How to check a yield claim
Ask for the calculation in writing: the rent or nightly rate assumed, the occupancy, and every cost deducted. Check the rent against listings for comparable units in the same building. Confirm whether the figure is gross or net and whether the rental model is lawful for that property. Then decide whether the purchase still makes sense if the net yield turns out lower than projected. That approach will serve you better than any headline number.
If the seller cannot or will not show how a figure was calculated, treat it as marketing rather than evidence.