"7% Guaranteed Rental Yield": How Much Will You Actually Get?

"🔥 7% per annum, guaranteed by the developer, for 5 years."

A line like this in a presentation looks like ready-made passive income. But this is exactly where buyers often make a mistake — taking an advertising figure for a confirmed cash flow.

In this article, I'll use a concrete example to break down what may stand behind "guaranteed rental yield" — and which conditions must be written into the contract for the word "guarantee" to actually mean something.

The Calculation That Seems Simple

Imagine: a condo in Phuket costs ฿10 million, and the presentation says:

🔥 7% per annum for 5 years.

At first glance, the maths is obvious:

• ฿10m × 7% = ฿700,000 per year;
• ฿3.5 million over 5 years.

But the same "7%" from different developers can mean completely different amounts in your pocket.

💬 Received an offer with "guaranteed returns"? Send it to me — I'll check the payout formula and show you what conditions hide behind the advertised percentage: message me on WhatsApp

What May Hide Behind "7%"

The percentage may be calculated:

• not from the full price of the condo, but only from its base portion;
• excluding furniture and additional payments;
• before taxes and bank fees are deducted;
• only after the unit is transferred — not from the moment of payment;
• on condition that the condo is handed over to a management company;
• with restrictions on the owner's personal use during part of the year.

The same rate on different calculation bases produces different amounts. So what matters is not only the number in the ad, but also the base — what exactly the percentage is calculated from.

When the Yield Is Truly Guaranteed

Only when the signed contract specifies:

• the exact amount or a clear calculation formula;
• the start date of the programme;
• the period and payment schedule;
• the currency of payments;
• the company obliged to pay — a specific legal entity;
• early termination conditions;
• liability for delayed or missed payments.

❗ A phrase in a brochure or a manager's promise is a marketing claim. An obligation only exists in a contract signed with a specific legal entity.

📄 Don't want to review the paperwork alone? Send me the contract — I'll check whether a real payout is secured in it, and on what terms: message me on WhatsApp

Where the Payout Money Comes From

Another important question: how is the "guarantee" funded?

Different models exist:

• 🏨 the income comes from the actual operation of a hotel management company — then the programme's stability depends on occupancy;
• 🏗 the payouts are financed by the developer itself — then its reputation and financial strength matter;
• 💵 your future income is partly built into the condo's price — you are effectively getting some of your own money back.

The last model deserves special attention: compare the price of the condo with similar units in the same area that come without a rental programme. If the "guaranteed" one is noticeably more expensive, you have already paid for part of your future income at purchase.

🏝 Not sure about the price? Send me two or three options — I'll compare them with similar units without a rental programme and show you the difference: message me on WhatsApp

The Jungle House Conclusion

We separate three things:

• Fact: a specific payout may be fixed in the contract — then it carries legal force.
• Forecast: future occupancy, rental rates and price growth — nobody can promise these.
• Marketing: a percentage in a presentation without detailed conditions is just advertising.

Before buying, evaluate not only the attractive rate, but also the payer's reliability, the real price of the unit and the full text of the contract.

💬 Send me an offer or a contract — I'll check the payout formula and show you what conditions hide behind the advertised percentage: message me on WhatsApp

Browse the Phuket new-developments catalogue on the Jungle House website.

The calculation in this article is an example. Rental yield and property price growth are not guaranteed unless the respective obligations are explicitly fixed in a contract. This article is for informational purposes only and is not investment advice.