Rental Yield & ROI Calculator — Sri Lanka
Thinking of buying an apartment or house to rent out? See the gross yield, net yield and payback period on your Sri Lankan property investment — in LKR.
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What is a good rental yield in Sri Lanka?
Gross yield is annual rent divided by purchase price. Net yield subtracts vacancy periods and running costs and divides by your total investment including purchase costs — it's the honest number.
Colombo apartments commonly produce gross yields in the 4–7% range, with serviced or short-stay units sometimes higher (and higher running costs). Land produces no rental income but historically appreciates; houses sit in between. Always compare net yield against what a bank deposit would pay on the same money, then weigh in appreciation potential and effort.
Yield is only half the story — total return also includes capital appreciation when you eventually sell.
Frequently Asked Questions
How do I calculate rental yield?
Gross yield = (monthly rent × 12) ÷ purchase price × 100. Net yield = (annual rent after vacancy − running costs) ÷ (price + purchase costs) × 100.
What is a good rental yield in Sri Lanka?
Colombo apartments commonly produce gross yields of 4–7%, with serviced or short-stay units sometimes higher (and higher running costs). Always compare net yield against fixed deposit rates and factor in capital appreciation.
Is rental income taxable in Sri Lanka?
Yes — rental income forms part of your assessable income for income tax. Rules and relief thresholds change with each budget, so check current IRD guidance or ask a tax adviser.
Apartment or land — which is the better investment?
Apartments generate rent from day one but carry management fees and depreciate structurally. Land generates nothing but often appreciates faster in growth corridors. Many Sri Lankan investors hold both.
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