Rental Yield Calculator
Gross on what it is worth, net on what it cost you.
- Annual rent at full occupancy
- ₹3,60,000.00
- Less 8% vacancy
- −₹28,800.00
- Less maintenance, society and property tax
- −₹72,000.00
- Net annual income
- ₹2,59,200.00
The two yields use different denominators on purpose. Gross is on the property's CURRENT market value, which is the honest opportunity-cost base for a hold-or-sell decision — the money you could release by selling. Net is on your ALL-IN acquisition cost, including stamp duty, registration and brokerage, which is the honest base for the return on what you actually put in. Indian metro residential gross yields run about 2% to 4%, and the national average across all segments is around 5%; anything above 8% almost always means the rent or the value entered is wrong. Note that rental income is taxable as income from house property, with a 30% standard deduction and home-loan interest deductible — none of which is modelled here.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
Rental yield is the annual rent as a percentage of what the property is worth, and it is the number that tells you whether a property is an investment or a purchase you happen to be renting out.
The two yields here use different denominators on purpose. Gross yield is on the property's current market value, which is the honest opportunity-cost base for a hold-or-sell decision — the money you could release by selling. Net yield is on your all-in acquisition cost including stamp duty, registration and brokerage, which is the honest base for the return on what you actually put in.
Indian metro residential gross yields run about 2% to 4%. Anything above 8% almost always means the rent or the value entered is wrong, and the calculator says so rather than reporting it as a finding.
Gross yield = annual rent / current market value x 100. Net yield = (annual rent less vacancy, maintenance, property tax and other costs) / all-in acquisition cost x 100.Rental income is taxable as income from house property, with a 30% standard deduction and home-loan interest deductible against it. Neither is modelled here, so the net yield above is pre-tax.
Frequently asked questions
What is a good rental yield in India?
For metro residential, 3% to 4% gross is normal and anything above 4.5% is unusual — South Mumbai and prime Bengaluru often sit near 2.5%. Commercial property yields considerably more, typically 6% to 9%, which is why the two should never be compared directly. The national average across all segments is around 5%, but that mixes tier-2 and commercial stock and is not the number to judge a metro flat against.
Why are Indian rental yields so low?
Because prices have risen faster than rents for a long time, and because home-loan rates around 8.5% sit well above the 3% or so a property yields. That gap is the whole reason renting and investing the difference often beats buying in financial terms — buying in India is a bet on capital appreciation, not on rental income, and it is worth being explicit about which of the two you are making.
What should I subtract to get the net yield?
A realistic vacancy allowance — one month between tenants is 8% of the year — plus society maintenance, property tax, insurance, a repairs reserve of around 0.5% of value a year, a management fee if you outsource it, and brokerage amortised over the lease. Those routinely take a 3.5% gross yield down to nearer 2.5% net, which is the figure to compare against any other investment.