What is the difference between gross rental yield, net rental income and cash after loan payments?
Gross yield can use annual rent divided by purchase price, before vacancy and costs. For planning, separate rent actually collected, property operating expenses, and financing/tax cash outflows. Any quoted net yield should state its deductions and cost base. A positive rental yield does not necessarily mean positive cash after instalments.
What to do next
- Record collected rent, vacant periods and any arrears instead of assuming twelve fully paid months.
- List property costs separately, then deduct the actual loan payments and estimated tax cash outflows.
- Ask a tax adviser which expenses qualify for tax deductions; keep the cash forecast separate from the tax computation.
Do not assume the whole instalment is tax-deductible. These planning definitions are not a statutory rental-tax calculation.
Sources and conditions
- HASiL — Public Ruling 12/2018: Income From Letting Of Real Property ↗Online sources checked:
- Maybank — Mortgage Term Loan Product Disclosure Sheet ↗Online sources checked:
Source checks are not a bank approval, legal opinion or verification of a particular property. Check current conditions with the linked provider before acting.