Achieving high rental yield
How does one achieve high rental yield in this current market? To answer this, first you must understand the current market situation. Expatriates pay package are not only becoming lesser, more companies are giving out personal lease package as part of their remuneration instead of corporate lease. As such, many would prefer to rent cheaper and pocket the difference. Besides this, current trend is for colleagues or friends who are living in Singapore alone to co share an apartment. This is to achieve economy of scale after all most of their time is spent outside at work or socializing.
With such phenomenon, smaller units which cost lesser will benefit more. While larger and luxurious units will face greater pressure with shrinking demand. Interestingly yield will be higher too when the unit is smaller. For example a completed property, Alexis at Queenstown. For a 400sqft unit which goes for current market price of $750,000 and a monthly rental of $2,500 will command a gross yield of 4%. This is a conservative number. Some units are still commanding $2,800 which yields 4.5%. Similarly at Alex Residences, the 1 bedroom (474sqft) and 2 bedroom(678sqft) are good size compact units which are efficiently designed.
Despite the weak rental market, properties like Alexis and Alex Residences which are situated just next to centralised mrt station will see healthy take up rate. Alex Residences which boast Marina Bay Sands like Rooftop Infinity Pool will definitely draw tenants over when it achieves TOP in end 2017 (expected).