The exit decides the entry.
Yield is the easy half. What decides whether a unit earns its money is what it costs you to hold and what it will take to sell — so those are the numbers we do first, starting with the one that dominates the maths.
You are probably here because:
- You already own somewhere, so the duty on the next one is the first thing that has to make sense.
- The rental yield you have been quoted was calculated on the price, and not on what the unit actually costs you to hold.
- You can see how to get in. You want somebody to be honest with you about getting out.
If two of those landed, the rest of this page is the order I would do it in.
Where the money actually goes.
A yield figure is a headline and it is almost always gross. Take the annual rent, divide by the price, quote the percentage. Nothing in that calculation knows about the duty you paid to get in, the months the unit sat empty between tenants, the agent fee on each renewal, the maintenance charge, the property tax at the non-owner-occupier rate, or the repairs that arrive in year four.
Put those in and a lot of units that looked like a sensible five drop to something you could have had from an instrument with no tenant, no leaks and no lock-up. That is not an argument against property. It is an argument for doing the arithmetic on the whole holding period rather than on the first year, because the first year is the one the brochure is describing.
Then there is the duty. Additional Buyer's Stamp Duty on a second or third residential property is large enough that it stops being a transaction cost and becomes part of the investment case: it is capital that has to be earned back before you are level, and it directly sets how long you must hold. Anybody who walks you through a purchase without putting that number at the top is describing a different deal from the one you are being offered.
So I would rather start at the exit. Who buys this unit from you in eight years, what will they be comparing it against, and what has to be true for the price to have moved? A unit with a thin resale market is a unit you are married to. If you want a sense of how an area behaves before you commit to one, the neighbourhood guides are where I keep that.
How this actually goes.
Five steps. The first two are the ones that disqualify most of the shortlist, which is exactly what they are for.
We price the duty before anything else.
ABSD on a second or third residential property is a large, immediate cost of capital, and it sets the holding period the rest of the case has to clear. Everything downstream is built on the after-duty figure, so it goes first.
Then we check what you can borrow across the portfolio.
TDSR counts every loan you service, not just the new one, and LTV falls to 45% on your second property and 35% after that. The loan usually barely moves; the cash required roughly doubles. That constraint, not the asking price, is what decides the size of the unit.
We model the holding cost, not the yield.
Rent, less the maintenance charge, less property tax at the non-owner-occupier rate, less agent fees on each renewal, less an honest vacancy assumption, less a repair allowance. Net, over the period you intend to hold. It is a duller number than the yield and it is the one that is true.
We work the exit before the entry.
Who your buyer is in eight years, what they will be comparing this against, and how thin the resale market for this unit type is in that area. A unit that only makes sense to you is one you will be holding for a long time.
We buy, or we do not.
If the numbers do not clear, I will tell you, and I will tell you what would have to change for them to. I would rather lose a commission than put you in a unit that needs the market to be kind to it.
From a second-property purchase.
“She talked me out of the first unit. The duty and the maintenance charge meant it needed nine years to break even, and she showed me the working. The one I did buy has been tenanted continuously since.”
PlaceholderWritten to a brief, not by a client. Replace it with a real review, or delete the entry in data/home.ts — the section drops off the page rather than breaking the build.
Start with the number that dominates.
Free, no sign-up, and nothing is sent to me. Do the first one before you shortlist anything — on a second or third property it changes what is worth looking at.
Stamp Duty Calculator
Start hereBSD plus ABSD, by citizenship and by how many residential properties you already hold. On a second or third purchase this is capital you have to earn back, and it sets your minimum holding period.
Affordability Calculator
TDSR counts every loan you already service, and LTV drops to 45% on a second property and 35% after that. The loan barely moves. The cash you need roughly doubles.
Progressive Payment Calculator
Under construction, you pay across ten stages tied to milestones — so the capital goes out slowly and the rent starts late. That shape matters more to an investment case than to a home.
If you would rather read first.
The market notes are the ones worth your time here — what is actually transacting, what a headline yield leaves out, and where the rental demand is genuinely coming from.
Send me the unit and one number.
Which project or unit you are weighing up, the asking price, and how many residential properties you already hold. I will come back with the duty, the cash required, and the net yield after holding costs — not a brochure, and not a call I have to book first.