This article was inspired by the questions that came in recently from our readers.
They all thread within the same line
- Hi JW, I am looking to retire and my goal is to create a secondary source of passive rental income.
- Priority lies in finding a private condo which can bring about the highest rental yield.
- With the minimal capital outlay. The idea is to fund it mainly with cash and cpf, with minimal to no loan.
Other nuances includes
- I have a preference for freehold property.
- It would be great if the second property could be a property that we can downsize into as our child moves out.
Identifying condos with the best rental yield that are actually investable
This set us on the quest to research and identify high rental yield condo developments that are actually investable.
I must stress the word investable, meaning something that we will actually purchase ourselves and be confident that we will make money off it.
High rental yield condo does not equate to good investment
Here’s the important thing to note about rental yield.
Rental yield is a composite metric that is calculated by “Gross annual rental income” divided by “Property Price”.
So you can actually get eye tricked by a sub par property whose price is falling due to poor buyer demand, but disguises itself as a high rental yield property.
High rental yield condo falls into 2 camps, the bad camp and the good camp.
The bad camp possess the following characteristics
- Rental yield is high due to falling property prices. And property price is falling as there is little homestay buyer demand, people generally don’t like to live there.
- Property is not resellable. Once you are in, there is no way out. If rental demand or rates dips, you are stuck with the property.
- Rental demand is not sustainable. This happens when tenants are only renting the unit because rates are cheap and there is no better or more convenient alternative at this point in time.
The good camp possess the following characteristics
- Rental yield is high due strong rental rates and growing tenant demand, and not falling property prices.
- Property Price is holding strong and appreciating.
- Property is liquid, there is proven demand from homestay buyers and investors for the development
- Property is deemed a premium product amongst tenants. Eg closest to mrt, city fringe, good facilities.
The goal of this article
Beyond providing you with a list of high rental yield condos in Singapore.
It would be much more fulfilling to provide you with the framework towards identifying high rental yield condos that are fundamentally sound and the wariness towards avoiding those that are not worth investing in.
Quick intro – Decoupling Expertise
Quick introduction, before you decide to commit the next 5 mins reading this article.
We are decoupling expertise, a team of specialist realtors that specialise in helping Singapore property owners derive the best strategy to purchase their second investment property without ABSD.
While decoupling property is often the go-to strategy that property owners adopt. We pride ourselves for helping our client explore and evaluate other alternatives that best suit individual circumstances and objectives.
Drop us a text to explore the best strategy to minimise ABSD on your next property purchase.
High rental yield condo that you should avoid
To truly appreciate the framework towards identifying a good rental yield property, we shall start with understanding what defines a bad rental yield property.
The following are some of key warning signs that will present itself for these sub par high yield properties.
#1 – Property Price has been falling year on year
The set of metrics that is jarring is the exceptionally high rental yield of above 4%, accompanied by a -ve rate of annualised capital appreciation.
This points to a high possibility of high rental yield attributed by sub par buyer demand and falling prices, rather than growing rental demand.
#2 – Flat or falling rental rates with little rental transaction.
To complement the first point, dig a little deeper into the rental price and volume trend for the development.
If you see a flat or falling rental rate that deviates from the current market norm, accompanied by sporadic monthly rental transaction volume.
This potentially points to a lack of sustainability in rental performance.
#3 – Sub-optimal Fundamental Attributes
Rental yield can sometimes be high because the property is cheap. The property is cheap because it has sub optimal attributes.
Suboptimal fundamental for rental property
- Far from MRT
- Far from amenities
- Do not provide full condo facilities
- Far from the city center
- Boutique development
The challenge with owning that second tier is that the strength I.e high rental yield that it is currently enjoying could be short lived.
Consider the scenario whereby a new mega full facilities condo development completes its construction phase. And it is located in the same area as your boutique condo and is situated closer to the MRT.
Your rental rates would be compressed and your rental demand would be diverted to the new development.
Side note, using stock picking as an analogy. Would you want to save on cost and purchase a cheap IBM stock or spend a little bit more and purchase a tier 1 Tesla stock ?
White haven – 6% “high rental yield” condo (Avoid)
Taking it one step further, let’s use an actual example to illustrate our point.
Sitting on top of the list of condo developments with the highest yield is a condo known as Whitehaven. It is a small 121 unit condo development, located in Pasir Panjang near Haw Par Villa MRT.
Whitehaven – High rental yield due to falling property price
It enjoys a rental yield of 6.3%. All sounds good thus far ? Not really.
A deeper look into its annualised capital appreciation, it shows a -3.4% depreciation per year. This meant that, assuming you were to buy into this development, your property price would decrease 3.4% every year.
This is the opposite of a healthy and fundamentally sound investment property which needs to provide an average 3% growth year on year.
And that is the reason why its rental yield is so high, due to falling property prices.
We will add a dedicated section later to provide a full list of high yield condo developments that shows signs of falling prices and suboptimal fundamentals for reference.
High rental yield condo that are worth investing in
Moving on, this is the curated list of high rental yield condo that possess both strong fundamentals and healthy above average rental yield.
We believe it provides a sustainable solution towards creating a quality stream of passive rental income and allow for potential capital gain and easy exit if priorities or plans change along the way.
Properties within this list comprise of the following characteristics.
#1 – High rental yield paired with healthy capital appreciation
These condos possess an above 3.5% to 4% rental but also possess above 3.5% annualised capital appreciation yearly.
This eliminates the concern over high rental yield attributed by falling prices and sieves out high rental yield property that rental rates are increasing inline with property price appreciation.
As a side note, aside from serving as a passive rental income vehicle, these property has potential to present you with a healthy capital upside if you chose to exit in 5 to 6 years time.
#2 – Strong fundamentals. No 1 choice for tenant within its area
These condo developments possess strong tier 1 attributes that gives it a competitive moat to secure its tenant demand.
You will see the following characteristics.
- Proximity to MRT, located closest to MRT
- Integrated development, amenities at door step
- Mostly RCR region, located very close to city fringe
#3 – Affordability
These developments are also curated based on affordability, the goal is to allow you to purchase it with full cash or with minimal loan that you can pay up in a couple of years.
#4 – No threat of lease decay
These development tenure all started in the 2014 to 2018 era, this meant that they are relatively young. You will be able to comfortably hold on to it for another 10 to 15 years and resell it without a concern for lease decay.
List of best rental yield condo with sound fundamentals
| Project Name | Tenure | Completion | No of units | Avg Price (S$ psf) | Avg Rent (S$ psf pm) | Rental Vol | Rental Yield (%) | Annualised Capital Gain (%) |
| SIMS URBAN OASIS | 99 yrs FROM 2014 | 2017 | 1,024 | 1,861 | 6.27 | 146 | 4 | 3.2 |
| THE POIZ RESIDENCES | 99 yrs FROM 2014 | 2018 | 731 | 2,014 | 6.2 | 111 | 3.7 | 4.1 |
| STURDEE RESIDENCES | 99 yrs FROM 2015 | 2019 | 305 | 2,069 | 6.62 | 45 | 3.8 | 3.1 |
| Queens Peak | 99 yrs FROM 2015 | 2020 | 736 | 2,203 | 7.03 | 166 | 3.8 | 3.9 |
| PARK PLACE RESIDENCES AT PLQ | 99 yrs FROM 2015 | 2019 | 429 | 2,219 | 7.46 | 103 | 4 | 3.2 |
| PARC ESTA | 99 yrs FROM 2018 | 2022 | 1,399 | 2,236 | 6.98 | 168 | 3.8 | 4.6 |
Sims Urban Oasis – 4% Rental Yield. 3.2% Yearly Capital Appreciation
Basic Information
Sims Urban Oasis is a relatively young condo development with lease starting in 2014 and achieved its TOP status in 2017.
It is the only mega development with 1,024 units in the city fringe Aljunied area. It is located a good distance away from the red light district Geylang. This allows it to leverage its city fringe location, while avoiding the stigma of living close to the red light district.
Location
Affordability
Based on the latest transacted prices, you can purchase a decent 1 bedroom unit between $850,000 to $950,000 with size ranging between 409 sqft to 463 sqft
Rentability
Proven rental demand with a high rental transaction of 146 transactions over the last 6 months. Average rental rates for 1 bedroom are trending upwards over the last 5 year time period.
Rental Fundamentals
Located 410m, 7 mins walk away from Aljunied MRT.
It is one of the largest full facilities mega condo developments located closest to Aljunied MRT. Its key competition for tenants will come from neighbouring development Penrose, TOP in 2024.
Resellability
The development has shown a proven track record of demand from home stay buyers and investors. Its demand is reflected in its healthy price appreciation of over 3.2% yearly.
Threat of lease decay
Low threat of lease decay. Lease starts 99 years from 2014.
The Poiz Residences – 3.7% Rental Yield, 4.1% Yearly Capital Appreciation
Basic Information
We like units in The Poiz Residences as we believe it offers a very strong appeal to tenants as a integrated development with amenities and MRT at its doorstep.
This will ensure that it maintains itself as top priority amongst tenants looking to be situated in Potong Pasir. Another upside to this development is that it will benefit from the spillover tenant and buyer demand from the up and coming Woodleigh district that is located 1 MRT stop away from Potong Pasir.
Location
Affordability
Based on latest transacted prices, a 1 bedroom unit in The Poiz Residences will average $1,989 psf. From a purchasing quantum perspective, you can get a 420 sqft unit at $835,000 and a 538 sqft unit at $1,045,000.
Within the range of $1.0 mil to $1.1 mil quantum, it is an interesting price point to own a unit in an integrated development in a RCR location.
Rentability
Healthy rental volume of over 111 rental transactions in the past 6 months. Rental rates have been consistently maintained over the years.
Rental Fundamentals
Strong rental fundamentals, given it is the only integrated development in the Potong Pasir area. From a tenant perspective, MRT station is literally at their doorstep, 2mins walk away.
The retail shops that form the integrated mall, serve the basic food and grocery needs of a tenant and home stay buyer.
Resellability
Very strong price appreciation track record of over 3.7% annually. This shows a strong demand from buyers looking to live in the area.
Threat of lease decay
Low threat of lease decay. Lease starts 99 years from 2014.
Sturdee Residences – 3.8% Rental Yield. 3.1% Yearly Capital Appreciation
Basic Information
We selected this development for its location. We are aware that the rental demand is very strong in the Kallang and Lavender area. White collared expats tend to have a preference renting close to the city fringe, yet be located in a more lifestyle oriented neighbourhood as compared to living in the heart of CBD.
Sturdee Residences is a 305 unit mid-sized condo development. It is within walking distance to City Square Mall and within walking distance from Bendemeer MRT.
Location
Affordability
The average psf of a 1 bedroom unit hovers around $2,120 psf. You can potentially own a 420 sqft unit at under $890,000.
Rentability
Stable and growing rental rates.
Rental Fundamentals
Proximity to MRT, 317m, 5 mins walk away from Bendemeer MRT which is located 2 stops away from Bugis MRT interchange.
Walking distance to City square for amenities and lavender and Kallang for lifestyle and F&B outlets.
Resellability
Strong price appreciation of above 3% annualised capital growth rate.
Threat of lease decay
Low threat of lease decay. Lease starts 99 years from 2015.
Queens Peak – 3.8% Rental Yield. 3.9% Yearly Capital Appreciation
Basic Information
Finding a good rental yield condo is a fine balance between optimizing for affordable purchase quantum, while selecting units in strategic locations that sees evergreen rental demand.
A city fringe location that is highly sought after by both overseas expats and even local singles is Queenstown. The district brings with it a nostalgic charm similar to Tiong Bahru but with more affordable rental rates for tenants and purchase price for investors.
Queens Peak is located 1 min walk away from Queenstown MRT station and is an established 736 unit condo development with full amenities.
Location
Affordability
Not necessarily the cheapest amongst the list of curated development. One bedroom units are priced around $2,221 psf.
Between $1.0 mil and $980,000 you can get a 441 sqft, 1 bedroom unit.
Rentability
Rental rates have been trending upwards mostly over the last 5 years, commanding premium rental rates at between $3500 to $4000 for 1 bedroom unit.
Rental Fundamentals
Proximity to MRT, 2 mins walk away from Queenstown MRT.
Resellability
Healthy and above average capital appreciation of 3.5% year on year.
Threat of lease decay
Low threat of lease decay. Lease starts 99 years from 2015.
Park Place Residences – 4% Rental Yield. 3.2% Yearly Capital Appreciation
Basic Information
By now you can tell that we see strength in integrated development being good investable high yield rental property.
What we like about integrated development as a rental property is its versatility. Consider the case where you own a 2 bedroom unit or a sizable 1 bedroom unit in an integrated development. This presents an option where you can consider downsizing into it while renting out your larger property as you downsize for retirement.
In the case of succession planning, you have the option of handing over the unit in the integrated development for your child homestay purpose as well.
This brings us to Park Place Residences. It is a 429 unit integrated development integrated into the Paya Lebar MRT station. It is located within walking distance from Payar Lebar Quarters, which provide a ready source of tenant demand and located within walking distance from malls like One KM mall and Paya Lebar Square.
Location
Affordability
Falling a little short on the affordability side of things, as RCR integrated developments are normally priced at a premium.
Be ready to fork out over $1.120,000 for a 484 sqft 1 Bedroom unit with average psf at $2,312 psf.
Rentability
High rental volume at over 103 units transacted in the past 6 months and high rental rates between 3.9k to 4k for 1 bedroom units.
Rental Fundamentals
Direct integration with Paya Lebar MRT Interchange for East West Line and Circle Line. Proximity to decentralised regional business center Paya Lebar Quarter and proximity to 2 malls.
Resellability
Healthy annualised growth rate of 3.2% per annual.
Threat of lease decay
Low threat of lease decay. Lease starts 99 years from 2015.
Freehold High Rental Yield Condo
I am aware that many of you out there looking for rental property with high rental yield, have a preference for freehold property. Having something with a freehold status provides that psychological cushion against lease decay.
But an important point to note is that a Freehold development in a decent sized development above 300 units is often priced with a premium and that premium pricing tends to put a drag on rental yield.
A lot of the affordable freehold condo development that comes with high rental yield and affordable quantum are 99% of the time boutique developments, and these boutique freehold developments are in no way better than a 99 year leasehold development with strong fundamentals.
Refer to this article “Buying small boutique condo in Singapore – 4 Key risk“ for further elaboration on the risk of buying into small boutique condos.
List of Freehold High Rental Yield condo that is worth looking at
Not our first priority, but here’s a list of Freehold condo with high rental yield, decent yearly price appreciation with development size greater than 100 units.
| Project Name | Tenure | Completion | No of units | Avg Price (S$ psf) | Sales Vol | Avg Rent (S$ psf pm) | Rental Vol | Rental Yield (%) | Annualised Capital Gain (%) |
| EDELWEISS PARK CONDOMINIUM | Freehold | 2006 | 517 | 1,085 | 9 | 3.26 | 31 | 3.6 | 3.9 |
| ATRIUM RESIDENCES | Freehold | 2008 | 135 | 1,257 | 2 | 4.32 | 22 | 4.1 | 6.1 |
| THE STELLAR | Freehold | 2008 | 162 | 1,389 | 2 | 4.4 | 19 | 3.8 | 4.7 |
| REZI 24 | Freehold | 2023 | 110 | 1,785 | 1 | 6.52 | 16 | 4.4 | 3.2 |
| VIZ AT HOLLAND | Freehold | 2008 | 166 | 1,831 | 4 | 5.45 | 19 | 3.6 | 5.2 |
Undervalued High Yield Property ?
As part of our research, we came across these few developments that we felt were wild cards. Basically these are developments located in the CCR or CBD area with strong rental demand. But due to its high initial launch prices that are not well received in the resale market, its prices have fallen below its initial price levels.
Note there are risks that come with these properties, as prices can continue to fall further. But for those of you that like to consider finding something that is potentially undervalued and comes with a high rental yield feel free to check out the following developments.
| Project Name | Tenure | Completion | No of units | Avg Price (S$ psf) | Avg Rent (S$ psf pm) | Rental Vol | Rental Yield (%) | Annualised Capital Gain (%) |
| EON SHENTON | 99 yrs FROM 2011 | 2017 | 135 | 1,460 | 7.07 | 31 | 5.8 | -2.9 |
| LIV ON SOPHIA | Freehold | 2016 | 64 | 1,840 | 6.93 | 14 | 4.5 | -2.6 |
| SOPHIA HILLS | 99 yrs FROM 2013 | 2018 | 493 | 2,155 | 6.47 | 100 | 3.6 | -0.4 |
Eon Shenton – 5.8% Rental Yield, -2.9% Price Depreciation
Full list of High rental yield condo that you should avoid
As mentioned earlier, this is a list of high yield condo with falling property prices and potentially unsound fundamentals.
| Project Name | Tenure | Completion | No of units | Avg Price (S$ psf) | Avg Rent (S$ psf pm) | Rental Vol | Rental Yield (%) | Annualised Capital Gain (%) |
| WHITEHAVEN | Freehold | 2016 | 120 | 1,086 | 5.72 | 36 | 6.3 | -3.4 |
| # 1 SUITES | Freehold | 2016 | 112 | 1,250 | 5.7 | 11 | 5.5 | -0.4 |
| LA VIDA @ 130 | Freehold | 2014 | 43 | 1,310 | 5.68 | 12 | 5.2 | -0.4 |
| TROPIKA EAST | Freehold | 2016 | 105 | 1,251 | 5.43 | 11 | 5.2 | -0.3 |
| 10 SHELFORD | Freehold | 2014 | 69 | 1,320 | 5.71 | 19 | 5.2 | -1.9 |
| CUBIK | Freehold | 2011 | 24 | 1,170 | 5.01 | 2 | 5.1 | -0.5 |
| LOFT@HOLLAND | Freehold | 2014 | 41 | 2,068 | 8.47 | 17 | 4.9 | -2.5 |
| AVANT RESIDENCES | 99 yrs FROM 2012 | 2012 | 50 | 1,507 | 6.11 | 14 | 4.9 | -1 |
| 28 RC SUITES | Freehold | 2016 | 45 | 1,432 | 5.78 | 12 | 4.8 | -1.3 |
| SUITES AT BUKIT TIMAH | Freehold | 2014 | 71 | 1,551 | 6.19 | 13 | 4.8 | -1.1 |
| LOFT @ NATHAN | Freehold | 2014 | 121 | 1,765 | 6.97 | 26 | 4.7 | -1.5 |
| OXLEY EDGE | Freehold | 2016 | 45 | 2,004 | 7.86 | 9 | 4.7 | -1.4 |
| ALTEZ | 99 yrs FROM 2008 | 2014 | 280 | 1,892 | 7.29 | 65 | 4.6 | -0.5 |
| CASA CAMBIO | Freehold | 2014 | 198 | 1,505 | 5.59 | 40 | 4.5 | -0.5 |
| LE SOMME | Freehold | 2014 | 25 | 1,531 | 5.57 | 3 | 4.4 | -0.1 |
| Rezi 35 | Freehold | 2020 | 44 | 1,568 | 5.66 | 13 | 4.3 | -0.4 |
| UP@ROBERTSON QUAY | 99 yrs FROM 2011 | 2015 | 70 | 2,028 | 7.26 | 21 | 4.3 | -2.2 |
| TURQUOISE | 99 yrs FROM 2007 | 2010 | 91 | 1,304 | 4.64 | 12 | 4.3 | -4 |
| WALLICH RESIDENCE | 99 yrs FROM 2011 | 2017 | 181 | 2,944 | 10.4 | 28 | 4.2 | -0.3 |
| NOVENA REGENCY | Freehold | 2015 | 56 | 1,767 | 6.1 | 20 | 4.1 | -1.9 |
| ROBIN SUITES | Freehold | 2016 | 92 | 2,107 | 7.25 | 21 | 4.1 | -0.8 |
| DEVONSHIRE RESIDENCES | Freehold | 2015 | 124 | 2,020 | 6.94 | 24 | 4.1 | -1.5 |
| 8 BASSEIN | Freehold | 2015 | 74 | 1,898 | 6.52 | 28 | 4.1 | -0.1 |
| ASPEN LINQ | 999 yrs FROM 1841 | 2016 | 17 | 1,665 | 5.71 | 7 | 4.1 | -1.2 |
| ESPADA | Freehold | 2013 | 48 | 2,233 | 7.63 | 62 | 4.1 | -0.3 |
| STELLAR RV | Freehold | 2015 | 120 | 1,810 | 6.15 | 36 | 4.1 | -0.6 |
| OUE TWIN PEAKS | 99 yrs FROM 2010 | 2015 | 462 | 2,287 | 7.66 | 119 | 4 | -1.7 |
| MARINA ONE RESIDENCES | 99 yrs FROM 2011 | 2017 | 1,042 | 2,056 | 6.75 | 254 | 3.9 | -0.9 |
| SUITES AT ORCHARD | 99 yrs FROM 2007 | 2014 | 118 | 2,027 | 6.65 | 30 | 3.9 | -0.3 |
| DAISY SUITES | Freehold | 2015 | 25 | 1,572 | 5.14 | 2 | 3.9 | -0.4 |
| V ON SHENTON | 99 yrs FROM 2011 | 2017 | 520 | 1,978 | 6.45 | 135 | 3.9 | -0.5 |
| MARINA BAY SUITES | 99 yrs FROM 2007 | 2013 | 221 | 1,820 | 5.93 | 40 | 3.9 | -1.2 |
| NYON | Freehold | 2022 | 72 | 2,333 | 7.56 | 15 | 3.9 | -0.8 |
| SANT RITZ | 99 yrs FROM 2012 | 2016 | 219 | 1,672 | 5.37 | 28 | 3.9 | -0.5 |
| FOURTH AVENUE RESIDENCES | 99 yrs FROM 2018 | 2022 | 476 | 2,312 | 7.32 | 82 | 3.8 | -0.7 |
| KATONG REGENCY | Freehold | 2015 | 244 | 1,772 | 5.6 | 52 | 3.8 | -0.6 |
| ROBINSON SUITES | Freehold | 2016 | 148 | 2,249 | 6.98 | 57 | 3.7 | -2.1 |
| NAUNG RESIDENCE | 999 yrs FROM 1883 | 2015 | 60 | 1,483 | 4.6 | 10 | 3.7 | -0.5 |
| SUITES @ NEWTON | Freehold | 2016 | 67 | 1,944 | 6.01 | 14 | 3.7 | -0.9 |
| THE RESIDENCES AT W SINGAPORE SENTOSA COVE | 99 yrs FROM 2006 | 2011 | 228 | 1,805 | 5.56 | 29 | 3.7 | -3.1 |
| THE PEAK @ CAIRNHILL I | Freehold | 2014 | 52 | 2,033 | 6.19 | 20 | 3.6 | -2.2 |
| BIJOU | Freehold | 2018 | 120 | 1,928 | 5.85 | 33 | 3.6 | -1.1 |
| SEASUITES | Freehold | 2016 | 52 | 1,656 | 4.93 | 15 | 3.6 | -0.2 |
