Does it make sense to buy a $1.6 million condo in Singapore if I plan to rent out the 2-bedroom unit

Buying a 1.6 million SGD condo in Singapore and renting out a 2-bedroom unit can make sense, but whether it's a good investment depends on factors like location, rental demand, and your financial goals.

Key Considerations:
- The average gross rental yield for condos in Singapore is between 3% and 4% in 2025. For a property purchased at 1.6 million SGD, this generally translates to annual rental income of around 48,000 to 64,000 SGD before costs.
- For 2-bedroom condos, the gross long-term rental yield is typically around 3.4% to 3.5%. On a 1.6 million property, that's about 54,400 SGD per year in rent.
- Rental rates for a 2-bedroom condo vary by location:
- Core Central Region (CCR): $4,500–$6,500/month
- Rest of Central Region (RCR): $3,500–$5,000/month
- Outside Central Region (OCR): $2,500–$4,000/month
Premium locations or prime districts may offer slightly lower yields but stronger long-term capital appreciation potential.
- Singapore's rental market has strong fundamentals and high occupancy rates, but yields are generally modest compared to other countries. Returns are often driven as much by capital appreciation as by rental income.
- You should also factor in property taxes, maintenance, agent fees, and any periods where the unit might be vacant.

When Does It Make Sense?
- If you prioritise stable returns and the probability of long-term property value growth, this is a typical investment profile in Singapore.
- The numbers are more attractive if your condo is in a district with strong expatriate or professional rental demand and is near MRT stations or amenities.
- If you are financing the purchase, consider your mortgage rate and rental income yield. Negative cash flow (rental income < total costs including loan repayments) can occur, but some investors accept this if they expect significant future appreciation.
- If your aim is yield above 4%, you’ll need to target specific locations or developments with above-average rental demand.

In summary, purchasing a 2-bedroom condo at 1.6 million SGD to rent out is a common and generally rational strategy for wealth preservation and moderate passive income in Singapore, as long as you are comfortable with typical yields and long-term property holding. Capital appreciation should be part of your return expectations, rather than just rental income.