Rental Property Calculator (VND)
Buying an apartment to rent out is an investment, and like any investment it has to clear three hurdles: what yield the rent earns on the purchase price, whether the unit throws off positive or negative cash flow each month after the mortgage, and what return your actual cash outlay earns. In Vietnam, where you are pricing everything in dong, the trap is mistaking the monthly rent for profit and forgetting the loan payment, the building management fee, vacancy and tax.
Take the calculator's default scenario: a 2.500.000.000 VND apartment, 40% down (so 1.000.000.000 VND of your own cash), a 1.500.000.000 VND loan at 10% over 20 years, rented at 15.000.000 VND a month. The gross yield — a full year of rent divided by price — is 7.20%. After stripping out 8% for vacancy and 1.5% of value in annual operating costs, the net yield, or cap rate, falls to 5.12%. The number that bites: because the 10% borrowing cost sits well above that cap rate, monthly cash flow is negative 3.800.325 VND — you top it up out of pocket each month — and cash-on-cash on your invested capital is -4.56%.
A negative figure does not automatically mean a bad deal, but it states plainly what the Vietnamese apartment market often glosses over: at today's prices, rent frequently does not cover the mortgage. Buyers are betting on price appreciation, not on cash flow. The calculator above separates each piece so you can see exactly where the money goes, then test how a larger down payment or a lower negotiated rate changes the monthly picture.
How the calculator works
1. Net operating income (NOI)
Start from rent and strip out the real leakage before any financing:
- Annual rent = monthly rent × 12 = 15.000.000 × 12 = 180.000.000 VND
- Effective rent = annual rent × (1 − vacancy) = 180.000.000 × (1 − 8%) = 165.600.000 VND
- Operating cost = price × 1.5% = 2.500.000.000 × 1.5% = 37.500.000 VND (maintenance, building management fees, property tax)
- NOI = effective rent − operating cost = 165.600.000 − 37.500.000 = 128.100.000 VND
NOI is the cash the property produces before the mortgage — it measures the asset itself, independent of how you finance it.
2. Gross yield, net yield and cap rate
| Metric | Formula | Result |
|---|---|---|
| Gross yield | annual rent ÷ price | 7.20% |
| Net yield = cap rate | NOI ÷ price | 5.12% |
The cap rate (capitalization rate) is simply the net yield — the return you'd earn buying the property all-cash, no loan. It lets you compare apartments against each other and against alternatives like a term deposit or a bond.
3. Cash flow and cash-on-cash
Once you borrow, subtract the debt service:
- Loan = price × (1 − down %) = 1.500.000.000 VND
- Monthly payment M = L·r / (1 − (1+r)⁻ⁿ), with r the monthly rate and n the number of months → 14.475.325 VND/month
- Annual debt service = M × 12 = 173.703.896 VND
- Annual cash flow = NOI − debt service = 128.100.000 − 173.703.896 = -45.603.896 VND (-3.800.325 VND/month)
- Cash-on-cash = annual cash flow ÷ cash invested = -45.603.896 ÷ 1.000.000.000 = -4.56%
Cash-on-cash is the figure closest to your wallet: it measures the return on the money you actually put in — the down payment — not on the whole price.
What the model leaves out
The tool computes year-one cash flow and holds it constant: it does not model property appreciation, rent growth with inflation, income tax on rent, or lumpy capital repairs. A bigger down payment shrinks the loan and improves cash flow, but dilutes cash-on-cash because you've tied up more capital. Read the output as a year-one snapshot, then layer your own appreciation assumption on top if you believe in it.
Worked example: a 2.500.000.000 VND apartment renting at 15.000.000 VND/month
Illustrative assumptions: 40% down, a 10%/year loan over 20 years, 8% vacancy, and operating costs of 1.5%/year of the price.
| Line item | Value (VND/year) |
|---|---|
| Annual rent | 180.000.000 |
| − Vacancy 8% | −14.400.000 |
| Effective rent | 165.600.000 |
| − Operating cost 1.5% | −37.500.000 |
| NOI | 128.100.000 |
| − Debt service (14.475.325/month) | −173.703.896 |
| Annual cash flow | -45.603.896 |
Three takeaways.
- The yield reads fine; the cash flow doesn't. A 5.12% cap rate looks acceptable next to a savings account, but borrowing at 10% — above the cap rate — means every borrowed dong drags cash flow down. The result is negative 3.800.325 VND a month and a -4.56% cash-on-cash.
- Leverage cuts both ways. Raise the down payment to 50% (cash in of 1.250.000.000 VND) and the smaller loan turns cash-on-cash into -1.33%. More equity eases the monthly bleed, at the cost of locking up more capital.
- Equity builds quietly through principal. Even with negative cash flow, after 10 years you've repaid 404.635.342 VND of principal; with the 1.000.000.000 VND down payment, your equity in the property (before any appreciation) is about 1.404.635.342 VND. That is why many still buy: they accept a monthly top-up in exchange for the asset and the bet on rising prices.
Try lowering the rate to whatever you can actually negotiate, or raising the rent to the going rate in your district, to see when cash flow turns positive. To compare owning against renting, pair this with FiMo's rent-vs-buy calculator.
Frequently asked questions
How do I calculate rental yield on an apartment?
There are two levels. Gross yield = annual rent ÷ price; for a 2.500.000.000 VND apartment renting at 15.000.000 VND/month (180.000.000 VND/year) that's 7.20%. Net yield, or cap rate = NOI ÷ price, after stripping 8% vacancy and 1.5% operating costs, which lands at 5.12%. Use gross yield for a quick scan; net yield reflects the asset's real earning power.
What is a cap rate and what counts as good?
The cap rate (capitalization rate) = net operating income (NOI) ÷ purchase price — the return you'd earn buying all-cash with no loan. In the example it's 5.12%. In Vietnam's apartment market cap rates typically sit around 4–6%, below mortgage rates of roughly 10%, which is why a pure buy-to-let usually runs negative cash flow. The further the cap rate sits above your borrowing cost, the more the property pays for itself.
What is cash-on-cash return?
Cash-on-cash is annual cash flow ÷ the cash you actually invested — mostly the down payment. Unlike the cap rate (measured on the whole price), cash-on-cash is measured only on your own equity. Example: -45.603.896 VND/year ÷ 1.000.000.000 VND invested = -4.56%. Because the loan rate sits above the cap rate, leverage pushes this negative — you fund the shortfall each month.
Why does a Vietnam rental often have negative cash flow?
Because the mortgage rate (~10%/year) is higher than the net rental yield (a 5.12% cap rate). When your cost of capital exceeds the asset's return, every borrowed dong drags cash flow down. In the default scenario cash flow is negative 3.800.325 VND a month. Buyers are mostly betting on price appreciation; the rent alone doesn't cover the loan. A larger down payment or a lower rate improves the monthly position.
How big a down payment should I make on a rental?
A larger down payment means a smaller loan and easier monthly cash flow. In the example, raising the down payment from 40% to 50% moves cash-on-cash from -4.56% to -1.33%. The trade-off is more capital locked up (1.250.000.000 VND instead of 1.000.000.000 VND), which can dilute your return on equity if prices don't rise. Balance "sleep-well positive cash flow" against "maximise return on capital."
Is rental income taxed in Vietnam?
Yes. An individual landlord whose annual rental revenue exceeds the exemption threshold pays VAT and personal income tax as fixed percentages of rental turnover (currently 5% each under the prevailing rules). This calculator does not deduct income tax when computing cash flow, so the result is before rental tax — subtract your expected tax to get the true net. Check the latest threshold and rates, since the rules can change.