Financial Calculators
Rental Yield Calculator
What a property earns as a percentage of what it is worth. Usually less than an FD.
Net rental yield
2.4%
gross yield 3%
- Rent per year
- ₹3,00,000
- After yearly costs
- ₹2,40,000
- Net income per month
- ₹20,000
Yield is measured on today's market value, not what you paid, because that is what the money could earn elsewhere. Indian residential yields typically sit at 2-4%; the investment case for property rests on appreciation, which this calculator deliberately leaves out.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
The number estate agents do not mention
Rental yield is the rent a property earns in a year divided by its current market value. Gross yield ignores costs; net yield subtracts property tax, maintenance, society charges and the months it sits empty between tenants. For Indian residential property the net figure is commonly two to three percent, which is why the investment case rests almost entirely on appreciation.
Measuring against today's value rather than purchase price is deliberate: today's value is what the money could earn elsewhere if you sold.
Gross and net yield
Gross yield = (monthly rent x 12) / property value\nNet yield = (monthly rent x 12 - yearly costs) / property valueWorked example: a flat worth Rs 1,00,00,000 renting at Rs 25,000 a month earns Rs 3,00,000 a year, a gross yield of 3%. After Rs 60,000 of yearly costs the net income is Rs 2,40,000, a net yield of 2.4%, or Rs 20,000 a month.
Frequently asked questions
What is a good rental yield in India?
Residential yields of 2-4% are typical in the major cities; commercial property can yield 6-9% but with higher vacancy risk and larger ticket sizes.
Should I include the home loan?
Yield measures the asset, not the financing. Compare the net yield with the loan rate: if the loan costs 8.5% and the property yields 2.5%, the gap is what appreciation must cover.
What costs should I count?
Property tax, society maintenance, repairs, insurance, brokerage on each new tenant, and one or two months' vacancy a year. Many owners understate all of these.
Is rent taxable?
Yes, as income from house property, after a standard deduction and the interest on any loan against it. The calculator shows pre-tax figures.
Property is an asset class, not a religion.
We help clients weigh a second property against a diversified portfolio on yield, liquidity and tax, not sentiment.