Net ROI calculated honestly: a real property in detail

Most rental yield numbers you see online are gross. Gross yield is the easy, friendly number that makes a property look great in a brochure. The problem is that gross yield doesn't pay your bills — net does. And the gap between the two is exactly where a lot of foreign buyers get disappointed after their first year of ownership.

So let me do something I rarely see in marketing material: take one realistic Pattaya condo and walk through the actual numbers, line by line, until we land on a net return I'd actually stand behind. No hype, no rounded-up fantasy figures. Just how I'd calculate it for you if you sat across from me in my office.

The example: a 1-bedroom condo in Jomtien

Let's use a unit I consider typical for an investment buyer — not the cheapest, not luxury, just solid and rentable: Purchase price: 3,500,000 THB (foreign freehold) Size: ~35 m², 1-bedroom Location: Jomtien, walkable to the beach, decent building with a pool and gym Condition: Fully furnished, ready to rent

This is the kind of unit that actually moves on the rental market. A studio in a no-name building deep in the suburbs is harder to rent and harder to sell again — those distort yield calculations because the "income" only exists on paper.

Now let's see what it earns.

From gross to net: where the money actually goes

For a unit like this, a realistic long-term monthly rent is around 18,000–22,000 THB, depending on furnishing, view and how well it's managed. I'll use 20,000 THB/month as a middle figure.

Annual rent (theoretical, 100% occupancy): 20,000 × 12 = 240,000 THB

Gross yield = 240,000 / 3,500,000 = 6.86%

That's right in line with the Thailand average (around 6.49% gross in early 2026, slightly higher in Chon Buri/Pattaya). Nice number. But we're nowhere near done.

Here's where the honesty starts. You will not have 100% occupancy. Realistically, plan for 2 empty months per year between tenants — sometimes less, sometimes more.

Realistic occupied rent: 20,000 × 10 = 200,000 THB

Now the costs that eat into that:

| Item | Annual cost (THB) | Note | |---|---|---| | Common area fees (~50 THB/m²/month) | ~21,000 | Paid whether rented or not | | Sinking fund / repairs reserve | ~5,000 | Averaged out | | Property management fee | ~20,000 | If you don't live here, you need this | | Furniture/appliance replacement | ~8,000 | Averaged — things break | | Insurance + misc | ~4,000 | | | Rental income tax (withholding) | ~12,000 | Often overlooked by foreigners | | Total costs | ~70,000 | |

Net income: 200,000 − 70,000 = 130,000 THB

Net yield: 130,000 / 3,500,000 = 3.71%

There it is. The gross 6.86% becomes a net ~3.7% once you account for vacancy, fees, management and tax. That's not a bad number for Thailand — but it's a very different story than "nearly 7%."

A note on the better cases: some of my colleagues' managed investors have hit net returns in the 5%+ range. That's real, but those were genuinely strong deals — bought below market, in high-demand buildings, with excellent management and low vacancy. Treat 5%+ net as the upper end you aim for, not the baseline you assume.

The numbers that don't show up in the yield

Net yield is only part of the picture. Two factors can move your actual return significantly — in both directions.

Capital appreciation. Pattaya is not Bangkok. Price growth here is uneven. Good locations near the beach and infrastructure have held and grown; oversupplied inland buildings have stagnated or dropped. I won't promise you appreciation — I've seen too many people buy off-plan expecting 30% growth and getting nothing. If your unit gains value, treat it as a bonus, not a plan. Realistic long-term appreciation in a good location might be in the low single digits per year, but this is a genuine estimate with wide error bars.

The exit. This is the one nobody likes to talk about. The resale market for foreign-owned condos in Thailand is liquid for good units and slow for bad ones. When you eventually sell, factor in: Transfer fees and taxes (split is negotiable, but budget for it) The possibility of selling below your purchase price Time on market — a condo can sit for many months

A property that yields 3.7% but takes two years to sell at a 15% loss was not a good investment, regardless of the rental headline. Liquidity is part of return, even if no calculator shows it.

How to read any yield claim from now on

When someone shows you a yield number, ask three questions:

1. Is it gross or net? If they don't immediately say "net," assume gross — and mentally cut it roughly in half. 2. What occupancy is it based on? "Guaranteed rental return" schemes often assume 100% and bake the cost into an inflated price. Be skeptical. 3. Are taxes and management included? If you live abroad, you will pay for management. Build it in.

A claim like "8% guaranteed return!" is a marketing red flag, not an opportunity. Real, sustainable net yields in Pattaya sit roughly in the 3.5%–5.5% range depending on the unit and how well it's run. Anything dramatically above that deserves hard questions, not excitement.

Conclusion

The honest headline for our example unit: roughly 3.7% net in a realistic year, with a path toward 5% if it's bought well and managed properly — plus optional, non-guaranteed appreciation on top.

That's a respectable return, especially in a country you may actually want to live in. But it's a return you earn through careful buying and active management, not one that lands automatically because a brochure said 7%.

If you take one thing from this: always insist on the net number, and run your own line-by-line calculation before you sign anything. If a seller can't or won't break it down the way I just did — that tells you everything you need to know.

If you want, send me a specific unit and I'll calculate its real net yield with you. No sales pitch — just the math.