Rental Yield Calculator India — Is Your Property a Good Investment?
Calculate gross and net rental yield on your Indian property investment. Compare rental returns with FD SIP and other investment alternatives.
Rental yields in India are among the lowest globally averaging just 2-3.5% in major cities compared to 5-8% in the UK and US. This means a Rs 1 crore property in Mumbai generates only Rs 2-3.5 lakh annual rent or Rs 17000-29000 per month. When you factor in maintenance society charges property tax and vacancy periods the net yield drops further. Understanding true rental yield helps you make informed real estate investment decisions.
How to calculate rental yield?
Gross rental yield = (Annual rent / Property purchase price) x 100. For a Rs 80 lakh property earning Rs 25000 monthly rent: (Rs 3L / Rs 80L) x 100 = 3.75% gross yield. Net yield deducts maintenance (Rs 3000-5000/month) property tax (Rs 5000-15000/year) insurance vacancy (1 month/year) and repairs (5% of rent). Net yield is typically 1-1.5% lower than gross.
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Rental Yield Calculator
Understanding Your Investment Returns
This calculator projects your returns using compound interest, where your earnings generate their own earnings over time. The power of compounding means that even small regular investments can grow into substantial wealth over long periods. For example, investing just Rs 5,000 per month at 12% expected returns for 25 years can grow to over Rs 1 crore — of which only Rs 15 lakh is your own money and Rs 85 lakh is compounding returns. The key factors that determine your final corpus are: the amount invested, the rate of return, the duration of investment, and the frequency of compounding.
Important Considerations
Past returns do not guarantee future performance, especially for market-linked instruments like mutual funds and equities. The returns shown are estimates based on the rate you enter. Equity investments carry market risk but have historically delivered 12-15% CAGR over 15+ year periods in India. Fixed income options like PPF (7.1%) and FD (6-7.5%) offer lower but more predictable returns. Diversifying across asset classes — equity, debt, gold, and real estate — reduces overall portfolio risk while optimizing returns for your risk tolerance.
Key Information
| Parameter | Details |
|---|---|
| Average Yield (Mumbai) | 2% - 2.5% gross |
| Average Yield (Bangalore) | 3% - 3.5% gross |
| Average Yield (Delhi NCR) | 2% - 3% gross |
| Average Yield (Pune) | 3.5% - 4% gross |
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Use Calculator NowFrequently Asked Questions
How to calculate rental yield?
Gross rental yield = (Annual rent / Property purchase price) x 100. For a Rs 80 lakh property earning Rs 25000 monthly rent: (Rs 3L / Rs 80L) x 100 = 3.75% gross yield. Net yield deducts maintenance (Rs 3000-5000/month) property tax (Rs 5000-15000/year) insurance vacancy (1 month/year) and repairs (5% of rent). Net yield is typically 1-1.5% lower than gross.
Is 3% rental yield good in India?
3% is average for Indian cities. While this seems low compared to FD returns (7%) remember that property also appreciates in value. If your property appreciates 5-6% annually total return becomes 8-9% which is competitive. However unlike FD property has maintenance costs transaction hassles illiquidity and tenant risks. For pure rental income 4%+ is considered good in India.
Rental income vs SIP which is better?
On Rs 1 crore: property gives Rs 2.5L rent + 5% appreciation = Rs 7.5L/year (7.5%). SIP at 12% on Rs 1 crore = Rs 12L/year. SIP clearly wins on returns and liquidity. However property offers leverage (buy Rs 1Cr property with Rs 20L down + Rs 80L loan) which amplifies returns. The leveraged return on your Rs 20L equity can exceed 20% when combining rental income and appreciation.
What is compound interest and why does it matter?
Compound interest means you earn interest on your interest, not just your principal. Over long periods, this creates exponential growth — even small regular investments can grow into substantial wealth over 15-25 years.
Is SIP better than lumpsum investment?
SIP invests a fixed amount monthly, averaging out market volatility through rupee cost averaging. Lumpsum works better when markets are low. For most investors, SIP builds discipline and removes the need to time the market.
How much should I invest monthly to become a crorepati?
At 12% expected returns, a monthly SIP of Rs 5,000 for 30 years grows to approximately Rs 1.76 crore. Increasing your SIP by 10% annually makes the corpus even larger. Start early, stay consistent.
Are investment returns taxable?
PPF returns are tax-free. Equity mutual fund LTCG above Rs 1.25 lakh/year is taxed at 12.5%. FD interest is taxed at your slab rate. NPS offers an additional Rs 50,000 deduction under 80CCD(1B).
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Last updated: March 2026