A “22% yield” on a sales deck and the real money landing in an owner’s account are different figures. Real ROI is calculated with the management-company split, taxes, costs and capital growth. Investors who calculate correctly don’t get disappointed in year three. Here are the formulas for gross and net yield, total ROI and payback — on a real Phuket unit, factoring in instalments and all costs.
Contents
1. What ROI is made of
An investor’s income in Phuket is two streams:
- Rental income — via a rental management program (a guide of ~8–10% owner net yield via the pool).
- Capital growth — especially at the construction stage, from launch to handover.
Total ROI captures both. The mistake is looking only at rent or only at growth.
2. Gross and net yield
- Gross = total rental pool revenue ÷ price — turnover before deductions (VAT, city tax, service charge, bank commission) and before the 60/40 split between owner and management company.
- Net to the owner = gross minus all deductions, multiplied by the owner’s share (60%). Real money in hand.
In Phuket, a pool model typically nets the owner ~8–10%. Compare projects on that figure, not on the pool’s gross revenue.
3. Formulas
- Pool gross revenue = total booking income for the year.
- Pool net profit = gross revenue − VAT − city tax − service charge − bank commission.
- Owner income = Pool net profit × 60%.
- Owner net yield = Owner income ÷ invested capital.
- Payback (years) = Investment ÷ owner income per year.
- Total ROI = (Owner income over the period + (Exit price − Entry price)) ÷ investment.
4. Example: a unit’s net yield
Take a Layan Verde studio at $224,776 with an owner net yield of 8% (the lower end of the ~8–10% guide):
| Line | Value |
|---|---|
| Unit price | $224,776 |
| Owner net yield (pool) | 8% |
| Owner’s net income per year | ~$17,982 |
This is already the final take-home figure for the owner: it accounts for the pool’s gross revenue, VAT, city tax, service charge, bank commission, and the 60% owner / 40% management company split. Income tax in your jurisdiction, if applicable, is deducted from this on top.
Payback on net yield: 224,776 ÷ 17,982 ≈ 12.5 years on rent alone. That excludes capital growth — added below.
5. Factoring in instalments
Instalments change the picture: you don’t invest the full sum at once. On a 35% plan the start is around $86,000, the rest by milestones to handover. While you pay in stages, the return on actually invested capital is higher, and growth toward handover falls on a smaller invested amount. That’s a leverage effect in a rising market.
🔗 More: Off-plan or ready →
6. Total ROI over several years
Add capital growth. For a $224,776 unit under the project’s real model — an owner net yield of ~8–10% via the pool plus capitalization (higher in early years, around 3% a year after):
| Metric | Value |
|---|---|
| Owner net yield | ~8–10% a year via the pool |
| Rental payback | ~12 years |
| Total ROI over 5 years | ~65% |
| Total ROI over 10 years | ~78% |
| IRR | ~40% |
It’s capital growth, not rent alone, that delivers a significant part of total ROI on an early entry. Model your own scenario in the yield calculator.
7. What not to forget
- One-time fees: sinking fund (
$924), leasehold registration ($2,592), meters. - Furniture package (~$10,875) — effectively mandatory for rental.
- Annual servicing: common area (~$1,109/yr).
- Income tax on rental income, if applicable in your jurisdiction.
- Vacancy between guests and seasonality.
🔗 Full estimate: Phuket taxes & fees →
8. Calculation pitfalls
- Confusing pool gross revenue with net income. They’re different figures — calculate on net.
- Ignoring one-time fees. They raise investment and lower ROI.
- Forgetting vacancy and season. Occupancy isn’t 100%.
- Ignoring growth. Rent is only part of the ROI; the other part is price growth.
- Pricing at peak rate. Use the annual average.
9. Case: two investors
Consider a typical scenario. The first investor saw “pool gross revenue ~22%” in a presentation and assumed it was his personal income — on that basis he planned payback in 4–5 years. In reality, after VAT, city tax, service charge, bank commission and the 60/40 split with the management company, his net income came out at ~8–10% — a solid figure, but noticeably below his naive expectations, and disappointment was inevitable.
The second investor calculated total ROI straight off the net model: budgeting a yield of ~8–10% via the pool plus construction-stage growth and instalments. Over 5 years their total ROI came out at ~65% — realistic, with no surprises.
Takeaway: correct ROI is the owner’s net yield (already accounting for all deductions and the 60/40 split) plus capital growth, factoring in instalments. Then the numbers match reality.
I’ll calculate net yield and total ROI for a specific unit, factoring in instalments and all costs.
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Informational only; yield depends on the unit, occupancy, taxes and terms; figures are indicative.