Rental Yield is the percentage return an investor earns on a property annually, relative to its market value. In India, residential rental yields typically range between 2% and 4%, while commercial properties can offer 7% to 10%.
This calculator helps you distinguish between Gross Yield (total rent received) and Net Yield (rent after maintenance, property tax, insurance, and vacancy), ensuring you make an informed real estate investment decision.
How to Calculate Real Estate Yields
To find your true return on investment, we follow a two-step mathematical approach.
- 1. Gross Rental Yield: (Annual Rent / Property Value) × 100.
- 2. Net Rental Yield: ([Annual Rent - Annual Expenses] / Property Value) × 100.
- 3. Expenses: Include monthly maintenance societies, annual property tax, insurance, and a provision for 1-month vacancy per year.
Example: Mumbai 2BHK Appartment
You buy a flat for ₹1.5 Crore and rent it for ₹40,000/month.
• Gross Annual Rent: ₹4,80,000
• Annual Expenses: ₹48,000 (Maintenance) + ₹12,000 (Property Tax) = ₹60,000
• Gross Yield: (4.8L / 1.5Cr) = 3.2%
• Net Yield: (4.2L / 1.5Cr) = 2.8%
If you take a loan at 9% interest, this property has a 'Negative Carry', meaning you are losing money every month even with a high-paying tenant.
Frequently Asked Questions
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.