Rental Yield Calculator — Davao
Tells you whether a Davao condo or house would actually pay you back as a rental. Enter purchase price and expected monthly rent for gross yield, net yield (after vacancy + dues + tax), and a market benchmark.
Data as of May 2026 · Davao residential market benchmarks (tool-params.json, dated + sourced)
Added to the cash outlay so yield is computed on the all-in cost basis, not the headline price. Set to 0% to see the price-only (listing) yield.
Davao prime-area vacancy runs ~8% (2026-05) — lower than Metro Manila. Outer condos sit higher.
Methodology, formula + sources
How this is calculated
Whether a Davao condo or house actually pays back as a rental. Every yield is computed on the all-in cash outlay — price plus buyer closing costs — not the headline price, so a listing's advertised yield is recovered only by setting closing to 0%. Gross is the quick headline; net subtracts vacancy and the real annual costs; cap rate here is the unleveraged net yield.
Formula
costBasis = price × (1 + closing%) grossYield = (rent×12 ÷ costBasis) × 100 effectiveRent = rent×12 × (1 − vacancy) expenses = dues×12 + propertyTax + maint×12 + mgmt×12 netYield = (effectiveRent − expenses) ÷ costBasis × 100 (= capRate)
Constants + data sources (each dated)
| Value used | Source | As of |
|---|---|---|
| Vacancy (Davao prime, typical): 8% (below Metro Manila) | Davao property market — Davao City residential market 2025–2026: net yield, vacancy, appreciation, rent growth, transaction costs | 2026-05 |
| Benchmark yields: gross ~6.5% · net ~4.8% | Bamboo Routes Davao | 2026-05 |
| Condo dues: ₱35–90/sqm/month | Davao property market dataset | 2026-05 |
| RPT (effective): 1–2% of assessed value | Davao City Treasurer RPT schedule | 2026-05 |
| Management fee: 8–12% of rent | Davao property market dataset | 2026-05 |
| Buyer closing cost: 4% of price (statutory DST/transfer/registration) | Statutory (DST / transfer / registration) | 2026-05 |
Worked example (reproduce this by hand)
₱5,000,000 price, ₱25,000/mo rent, 8% vacancy, 4% buyer closing, no advanced expenses entered.
- costBasis = 5,000,000 × 1.04 = ₱5,200,000
- gross = 300,000 ÷ 5,200,000 = 5.77%
- effectiveRent = 300,000 × 0.92 = ₱276,000
- net = 276,000 ÷ 5,200,000 = 5.31% → cash-flow positive
→ Gross 5.77% · net 5.31% on a ₱5.2M basis (at 0% closing the basis is ₱5.0M and gross is exactly 6.00%)
Assumptions
- Unleveraged — cap-rate-style view; a mortgage changes cash-on-cash materially.
- Closing slider at 0% recovers the listing-only headline yield.
- Property tax accepts either % of price or an absolute ₱ figure (mode toggle).
Known limits — what this does not model
- Mortgage financing / cash-on-cash leverage.
- Capital gains tax on eventual sale.
- Condo special assessments and Davao-specific calamity insurance.
How yield works in the Davao market
The Davao rental market has lower vacancy (~10–12%) than Metro Manila but rents per square metre run lower too. Net yields of 4–5% on well-located condos are normal; standalone houses in subdivisions yield less because turnover is slower and management overhead is higher.
Three cost drags eat into the gross-net gap most often:
- Condo association dues: ₱35–90 per square metre per month at Davao buildings, with newer Ayala/DMCI towers at the higher end.
- Annual real-property tax: 1–2% of assessed value, billed by the City Treasurer.
- Vacancy gaps: 1–2 months a year is typical between tenants; 3+ months suggests the asking rent is above market.
Frequently asked questions
What is a good rental yield in Davao?
How is gross yield different from net yield?
Why does location matter for yield?
Should I include closing costs in property price?
What if the property is cash-flow negative?
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These estimates are for budgeting. Confirm current rates and legal terms with your provider or a Davao-based lawyer for binding decisions.