All Landlord Guides·Hong Kong landlords
Gross Yield vs Net Yield for Hong Kong landlords
Gross Yield is the listing headline: annual rent divided by purchase price. Once you hold the flat, Net is the more honest percentage — it subtracts the recurring costs that come with Hong Kong residential ownership.
Two flats can share the same Gross and still split on cashflow. The gap is holding cost, not the agent’s number.
The problem with one yield figure
A single “yield” cell answers the wrong question. Gross ignores Mortgage Repayment, Management Fees, Rates, Government Rent, and Property Tax — so two flats can look identical on a listing while one is cashflow positive and the other is not.
Flat A — same Gross, cashflow positive
HK$8,000,000, HK$28,000 rent — 4.2% Gross. Modest Management Fees, no mortgage. Recurring outflows leave a surplus most months.
Flat B — same Gross, cashflow negative
Same purchase price, same rent, same 4.2% Gross. A large monthly Mortgage Repayment plus heavier Management Fees. The listing headline matches Flat A; the bank does not.
Agents quote Gross because it is comparable with almost no information. Landlords need Net (and then monthly cash) once the keys are in hand.
How to read Gross vs Net
Gross Yield
Gross Yield = (annual rent ÷ purchase price) × 100
Annual rent ≈ monthly rent × 12Purpose: a listing screen — fast, comparable, incomplete.
Net Yield
Net Yield = ((annual rent − annual recurring costs) ÷ purchase price) × 100
Purpose: a holding-cost screen — the more honest percentage once you own the flat.
Typical Hong Kong Net subtracts
- Mortgage Repayment
- Management Fees
- Rates
- Government Rent
- Property Tax
- Insurance
- Routine maintenance
Usually left out of a simple Net screen
- Agency Commission
- Legal Fees
- One-off Repairs & Maintenance
Agency Commission, Legal Fees, and One-off Repairs & Maintenance still matter for cash — they just belong in This Month when they fall due, not in the holding-cost percentage. For the named Hong Kong lines, see cashflow categories.
Same flat, two percentages
One illustrative Hong Kong residential flat. Round figures, not a real listing:
Purchase price
HK$8,000,000
Monthly rent
HK$28,000 → annual rent HK$336,000
Annual Gross Yield
HK$336,000 ÷ HK$8,000,000 = 4.2%
Annual recurring costs
HK$256,000 — Mortgage Repayment HK$156,000, Management Fees HK$30,000, Rates HK$12,000, Government Rent HK$8,000, Property Tax HK$40,000, Insurance HK$4,000, routine maintenance HK$6,000.
Annual net / Net Yield
HK$80,000 remaining → 1.0% Net. The gap is 3.2 percentage points.
Gross Yield
4.2%
HK$336,000 ÷ HK$8,000,000 — the listing-style headline
Net Yield
1.0%
(HK$336,000 − HK$256,000) ÷ HK$8,000,000 — after recurring costs
The gap: 3.2 percentage points
A listing that shows 4.2% Gross becomes roughly 1.0% Net once typical recurring costs (starting with Mortgage Repayment) are included. Use Gross to screen. Use Net to decide. Then track the actual monthly cash.
A good Net still is not “this month”
Net Yield is an annual percentage against purchase price. It does not tell you whether this calendar month is cashflow positive.
Property Tax instalments, agency commission, a void, or a repair still move cash on specific dates. Those lumps can make This Month red while Net still looks acceptable — or the reverse. Yield screens leave them out on purpose.
That is why you still need two cash readings: cash that actually moves this month, versus what the flat usually does. See This Month vs the usual month.
How Cashflow Positive handles both numbers
In Cashflow Positive, Gross and Net come from the same structured cashflow — not a second yield spreadsheet.
Purchase price + rent → Gross
Set purchase price on the property and track Rental Income. Gross Yield is annualised rent ÷ purchase price — the listing-style headline from numbers you already store.
Recurring items already tracked → Net
Named Hong Kong lines (Mortgage Repayment, Management Fees, Rates, Government Rent, Property Tax, and the rest you add) annualise from the usual month. Net uses that recurring run-rate against the same purchase price — no second spreadsheet of costs.
This Month and Normalised stay separate
Lumps — a Property Tax instalment, agency commission, a repair — still hit This Month on their due dates. They do not rewrite the usual month, so the yield screen is not rebuilt by one large payment.
For a quick estimate before you add a property, use the free Hong Kong Rental Yield Calculator. For cashflow across every flat, see multi-property portfolio tracking.
FAQ
What is Gross Yield vs Net Yield for a Hong Kong rental flat?
Gross Yield is annual rent divided by purchase price — the listing screen. Net Yield subtracts typical recurring costs first (Mortgage Repayment, Management Fees, Rates, Government Rent, Property Tax, Insurance, routine maintenance), then divides by purchase price. Net is the more honest percentage once you hold the flat.
Which costs stay out of a simple Net Yield screen?
One-offs such as Agency Commission, Legal Fees, and One-off Repairs & Maintenance usually stay out of Net Yield. They matter for This Month when they fall due, not for the steady holding-cost percentage.
Does a good Net Yield mean the flat is cashflow positive this month?
No. Yield is a percentage against purchase price. This Month is cash that actually moves in the calendar month — including lumps Net leaves out. A flat can look fine on Net and still be tight when Property Tax or a repair lands. Use Net as a filter, then read This Month and the usual month.
Screen Net, then track the month
Start free — 1 property. Put purchase price and rent on the flat for Gross, add the recurring Hong Kong costs you already track for Net, and keep This Month honest when lumps land.
Related reading: This Month vs the usual month, cashflow categories, multi-property portfolio, and the full Landlord Guides list.
Educational only — not financial or tax advice.
Start free — 1 property
Estimate Gross and Net on paper, then track monthly cashflow on one Hong Kong residential flat — without rebuilding a spreadsheet for every cost change.