Property Returns: Here Is The Right Way To Calculate It

· Thinking of Selling

Selling Your Property

The Financial Calculations 

All you have to do is to make sure that you have factored all your costs in.

Let’s look at an example.

You purchased a condo for $1 million.

To make things easy, this figure includes all the usual costs like lawyer fees and stamp duty.

After 10 years you decide you want to cash out, and manage to actually sell it for $1.2 million.


Now, most people would assume you just made a solid $200,000.

… But if you really look at it, was it really a positive return after all?

To be certain, the very first thing that you have to take into account is the interest on the loan.

Say you loan a total of $750,000 based on a typical down payment of 25 percent.

At a 2.2% interest rate and a 10 year loan repayment period, you are looking at a total of $138,553 in cumulative interest payments.

This means your profit of $200,000 has now been significantly cut down to just ($200,000 – $138,553) $61,447.

That’s not all.

Remember those monthly maintenance fees you were paying? Surprise surprise, they’re back to haunt you.

Let’s say this fee was set at $200 – a relatively reasonable price considering the condo’s $1 million quantum.

If you multiply this $200 over a period of 10 years, you will realise that you have spent a solid $24,000 on just monthly maintenance fees alone!

Which leaves us with a remaining profit of ($61,447 – $24,000) $37,447.

Note that we are not taking into account maintenance of your individual unit – which by the way, can really add up. Especially if you settled for an older apartment.

Notice how quickly our profits are already dwindling?

Now we also have to factor in the property taxes that you have been paying.

Let’s go with an Annual Value of the property at $36,000.

This comes up to a yearly net tax payable amount of $1,120. (Feel free to do the math again)

After 10 years, you would have paid a total of $11,200.

That leaves us with a remaining profit of ($37,447 – $11,200) $26,247.

Normally, you would also have to include the cost of renovations in. But for simplicity’s sake, let’s assume it was a new launch and you went ahead with minimal renovation that cost just $20,000.

And so, that leaves you with a grand total of ($26,247 – $20,000) $6,247.

Now if you had actually spent more on renovations or even maintenance for your place, you would have actually made a loss – despite the $200,000 lump sum resale return!

To paint a clearer picture, you are looking at an annualised return of just 0.06%.

And to further put things into perspective, any fixed savings account or insurance policy would have undoubtedly better appreciated with this volume of money.

True, you did have a place to call your own for a good 10 years. But imagine if you have actually paid more attention to all this beforehand and put some financial measures in place to ensure easy and better rewards!

Let us put the figures into a table for easy reference:

Price of Property $1,000,000

Sold $1,200,000

Gross Profit $200,000

Interest Payments $138,553

Maintenance Fees $24,000

Property Tax $11,200

Renovation $20,000

Net Profit $6,247

Final Word

Now that Singapore has officially taken top spot in the world for property investment prospects from a 2020 price increase standpoint, it is only natural for people to start looking at diversifying their portfolios and increasing their profits with property investments.

We hope that this piece has gone some way in helping you accurately calculate your property returns in line with this trend.


We would love to help you get the most out of your property.

Should you be thinking of selling, or would simply like an update of where your property sits in today's market, book a non-obligatory discussion with one of our TemasekClass consultants.