Rental yield calculator
Enter the property value, the rent and what you actually pay out each year. The calculator returns gross and net yield, with vacancy accounted for rather than assumed away.
Yield measures rental return against capital value only. It excludes capital appreciation, financing costs and tax, each of which can matter more than yield to an actual investment decision.
Net rental yield is (annual rent less annual costs) ÷ property value × 100. Gross yield uses rent alone and ignores costs and vacancy, which is why it is usually two to three times the figure an owner actually experiences.
How the calculation works
Gross yield is easy and misleading. Net yield takes more inputs and is the number worth having.
The formula: Net yield = (Annual rent − Expenses) ÷ Value × 100
A flat worth ₹80 lakh renting at ₹22,000 a month has a gross yield of (22,000 × 12) ÷ 80,00,000 × 100 = 3.30%. Subtract owner-paid maintenance of ₹3,500 a month, property tax of ₹12,000 and repairs of ₹15,000, and allow one month of vacancy, and the net yield falls to about 2.19%.
That gap between 3.30% and 2.19% is the whole point of computing net yield. Gross yield is what gets quoted in listings and conversations; net yield is what arrives in the owner’s account.
Inputs you will need
The property value — current market value if you are assessing whether to hold, purchase price if you are assessing the original decision. The two give different answers and both are legitimate questions, but do not mix them.
Annual costs that the owner actually bears: society maintenance where the owner pays it, property tax, insurance, repairs and any management fee. And a realistic vacancy allowance — one month a year is a common assumption in Indian residential lettings, and assuming zero is the most frequent way these calculations are made to look better than reality.
- Value, on a stated basis. Market value or purchase price — not a mix.
- Costs the owner bears. Maintenance, tax, repairs, insurance, management fee.
- A real vacancy allowance. Zero vacancy is the most common self-deception here.
Worked example: ₹80 lakh flat renting at ₹22,000 per month
The same property returns anywhere between 1.89% and 3.30% depending entirely on which costs you count.
| Scenario | Annual rent | Annual costs | Net yield |
|---|---|---|---|
| Gross, no costs or vacancy | ₹2,64,000 | — | 3.30% |
| With costs, no vacancy | ₹2,64,000 | ₹69,000 | 2.44% |
| With costs and 1 month vacancy | ₹2,42,000 | ₹69,000 | 2.16% |
| With costs and 2 months vacancy | ₹2,20,000 | ₹69,000 | 1.89% |
| If rent were ₹30,000 | ₹3,30,000 | ₹69,000 | 3.26% |
What is a good rental yield in India?
Residential yields in Indian metros have historically been low by international standards. Gross yields in the major cities have commonly sat between roughly 2% and 4%, with net yields after costs and vacancy frequently in the 1.5% to 3% range. Commercial and retail property typically yields meaningfully higher, which is part of why institutional money concentrates there.
The reason yields are low is that residential capital values have been driven substantially by expectations of appreciation rather than by rental income. That makes yield an incomplete measure of the investment: an owner may accept 2% because they expect capital growth, and whether that is sound depends on assumptions this calculator does not address.
Use yield for what it is good at — comparing properties against each other on a like-for-like basis, and comparing rental return against what the same capital would earn elsewhere. Do not use it alone to decide whether to buy, since it excludes appreciation, financing costs, tax treatment and liquidity, each of which can dominate the decision.
- Indian residential gross yields are typically 2–4%. Net after costs is usually lower still.
- Commercial generally yields higher. Which is where institutional capital concentrates.
- Yield excludes appreciation. Which is what most residential buyers are actually buying.
- Best used for comparison. Between properties, or against other uses of the capital.