Rental Yield Calculator
Calculate the gross and net rental yield on your property investment based on property value, rent, and expenses.
* All calculations are approximate.
How Rental Yield Calculator Works?
Calculate the gross and net rental yield on your property investment based on property value, rent, and expenses.
Enter your property value, monthly rent received, monthly maintenance cost, and expected vacancy months per year.
Annual rental income is calculated as monthly rent multiplied by the number of occupied months (12 minus vacancy months).
Annual expenses include monthly maintenance multiplied by 12.
Gross rental yield is computed as (Annual Rent / Property Value) x 100.
Net rental yield is computed as ((Annual Income - Annual Expenses) / Property Value) x 100.
Formula Used
Gross Yield = (Monthly Rent x 12 / Property Value) x 100; Net Yield = ((Annual Income - Annual Expenses) / Property Value) x 100
This calculator provides a simplified estimate. Actual returns should also factor in property tax, insurance, loan EMI, and capital appreciation for a complete investment analysis.
Important — Read Before You Decide
- Average rental yield in Indian metros ranges from 2-4%, which is lower than many global cities.
- Rental yields tend to be higher for smaller apartments and commercial properties compared to large luxury homes.
- Net yield is a more accurate measure of investment returns as it accounts for maintenance and vacancy costs.
- Property appreciation (capital gains) is a separate return that should be considered alongside rental yield.
- Vacancy risk is real — most rental properties in India experience 1-2 months of vacancy per year during tenant transitions.
- Maintenance costs increase as the property ages, which gradually reduces your net yield over time.
- Location, connectivity, and nearby amenities are the biggest factors affecting both rent levels and vacancy rates.
What Happens If You Ignore These?
- Ignoring maintenance and vacancy costs leads to overestimating your actual rental returns.
- Buying property purely for rental income without checking yield often results in returns lower than fixed deposits.
- Not factoring in property tax, insurance, and repair costs gives an unrealistic picture of profitability.
- High vacancy rates in certain areas can turn a seemingly good rental investment into a loss-making one.
- Overleveraging with a home loan for rental property can lead to negative cash flow if rent does not cover EMI.
Smart Tips
- A gross rental yield above 3% is considered decent in Indian metro cities.
- Furnished apartments typically command 20-30% higher rent than unfurnished ones.
- Screen tenants carefully and use proper rental agreements to minimize vacancy periods.
- Consider investing in areas with upcoming metro lines or IT parks for better future yields.
- Compare your net rental yield with fixed deposit rates — if FD gives more, reconsider the investment.
Frequently Asked Questions
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