Rental yield
What rent earns you as a yearly return on the home's price, and the rent you'd need for a target return.
Return from the rent you get
Rent needed for a target return
About this calculator
Gross yield and net yield
Gross rental yield is the yearly rent divided by the price of the property. It is the figure quoted in listings and it flatters almost every property, because it ignores everything it costs to be a landlord.
Net yield subtracts the months the flat sits empty between tenants, society maintenance, property tax and repairs. Those are not small: they routinely turn a 3.5% gross yield into something closer to 2.5%. The second figure is the one to compare against a fixed deposit.
What rent a target yield needs
The second section works backwards. Enter the price and the yearly return you want and it gives the monthly rent required. This is a quick reality check before buying: if a ₹95 lakh flat needs ₹39,583 a month to yield 5%, and similar flats in the building rent for ₹28,000, the yield on offer is around 3.5%, not 5%.
Residential rental yields in Indian cities have generally sat in the low single digits, well below what a fixed deposit pays. Property buyers are mostly counting on the price rising, not on the rent. That may well happen, but it is a different bet and should be judged separately.
Common questions
What is a good rental yield in India?
Residential yields in most Indian cities have been in the 2% to 4% range gross, which is below a fixed deposit. Commercial property typically yields more but carries longer vacancies and larger ticket sizes.
How do I calculate rental yield?
Divide the yearly rent by the property price and multiply by 100 for the gross yield. For net yield, first subtract vacant months, maintenance, property tax and repairs from the rent.
What rent do I need for a 5% yield?
Multiply the price by 5% and divide by 12. A ₹1 crore property needs about ₹41,667 a month before costs. Enter your figures above for the exact amount.
Is rental income taxed?
Yes. Rental income is taxable, though a standard deduction is allowed on the annual value and home loan interest on a let-out property can be set off. Check the current rules or ask a tax adviser for your situation.