Enter property + rent details
Default is a ₹1 Cr property renting at ₹28,000/month with 20% expense ratio — typical Bangalore 2BHK investment.
Gross vs net rental yield
Gross yield = annual rent ÷ purchase price × 100. This is what brokers and listing sites quote. It ignores every real-world cost.
Net yield = (annual rent − annual expenses) ÷ purchase price × 100. Expenses in the Indian context typically include: society maintenance charges (₹3–12 per sqft/month), property tax (0.1–1.5% of capital value annually), insurance, repairs, and 1 month of rent lost to vacancy / broker fees each year. Collectively these run 15–25% of gross rent.
Residential real estate in Indian tier-1 cities yields 2.0–3.5% net. That’s low by global standards because Indian property prices price in expected capital appreciation. If you’re holding for income alone — commercial, pre-leased REIT, or debt instruments usually outperform.
Yield on typical Indian residential investments
| Property | Price | Monthly rent | Gross yield | Net yield (20% expenses) |
|---|---|---|---|---|
| 2BHK Whitefield (Bangalore) | ₹1.0 Cr | ₹28,000 | 3.36% | 2.69% |
| 3BHK Gachibowli (Hyderabad) | ₹1.5 Cr | ₹45,000 | 3.60% | 2.88% |
| 2BHK Andheri East (Mumbai) | ₹2.2 Cr | ₹65,000 | 3.55% | 2.84% |
| 3BHK Sector 63 (Gurugram) | ₹2.5 Cr | ₹55,000 | 2.64% | 2.11% |
Frequently asked
What is a good rental yield in India?
For residential property in tier-1 Indian cities, gross yield of 3.0–4.0% and net yield of 2.0–3.5% is the market norm. Anything above 4% net is either commercial, peripheral, or short-term-rental inflated. Below 2% net means the price has run ahead of rent.
Why is rental yield so low in India?
Indian residential prices embed a large expected-appreciation premium. Rents have risen roughly 3–5% annually over the last decade; property prices have risen 6–9% in most metros. The gap shows up as compressed yields. Investors are implicitly betting on continued capital appreciation — which works until it doesn’t.
Should I count capital appreciation in yield?
No — capital appreciation is a separate return component called CAGR. Yield measures the cash-flow return; appreciation measures the asset-price return. Total return = yield + appreciation. Our property appreciation calculator handles that side.
What expenses should I subtract for net yield?
In India, budget: society maintenance (₹3–12/sqft/month), property tax (₹5,000–60,000/year depending on city and property size), insurance (₹2,000–10,000/year), repairs (₹10,000–50,000/year amortised), broker fee on re-letting (equivalent to 1 month rent every 2–3 years), and vacancy (assume 1 month’s loss per year). Together these typically total 18–25% of gross rent.
Is rental income taxable in India?
Yes. Rental income is taxed under “income from house property.” Gross rent − municipal tax − 30% standard deduction − home loan interest = taxable rental income. Our tax benefit calculator covers the full home-loan tax treatment.