Singapore 5-bed rental at S$1.849m: is eleven months’ rent conservative enough?

[gate.strong]

I’m assessing a 5-bed country home in Singapore at S$1,849,000, with expected rent of S$11,620 per month. That gives a headline gross yield near 7.5%, but the figure is obviously less attractive after vacancy and operating costs.

My model uses eleven rented months, then deducts management, routine maintenance and a reserve for one larger repair. The building appears sound, although I’m concerned that vacancy or tenant turnover could make the reserve look optimistic. Which local cost—property tax, insurance or something else—is most often underestimated, and what net yield would justify the risk for you?

 

[common_creek]

Property tax is the line I’d clarify first, using the property’s actual treatment rather than a generic percentage. I would also separate turnover costs from ordinary management: an empty month, preparation work and finding the next tenant can arrive together.

Eleven months’ rent is S$127,820 annually, so the yield is already about 6.9% before any expenses. Do you have evidence supporting S$11,620 from comparable signed leases, or is it an asking-rent estimate?

 

[ink.open]

I’m not convinced that assuming exactly one vacant month is conservative. A 5-bed home may have a narrower tenant pool, so vacancy could be lumpy rather than neatly recurring once a year. Run a case with a longer gap plus maintenance during turnover. I’d also want to know the lease length you’re modeling, because frequent reletting changes both costs and cash-flow reliability.

 

[timo.keel]

Build three versions: full occupancy, eleven months, and a stressed turnover year. In each, include property tax, insurance, management, recurring upkeep, the larger repair reserve and any tenant-change costs. Then test financing at a higher interest cost if borrowing is involved.

I wouldn’t choose a fixed net-yield target without comparing it with the financing cost and alternative uses of S$1,849,000. The useful hurdle is the return left after the stressed case, not the 7.5% headline.