Rental Yield Calculator — Know Your Property Investment Returns — India 2026
Calculate gross and net rental yield on your property investment. Compare rental returns across cities and find out if your property is a good investment.
Investing in property for rental income is a popular strategy in India but few investors actually calculate whether their rental yield justifies the investment. The average rental yield in Indian metros ranges from 2-4% which is often lower than a simple FD. However when you factor in property appreciation of 5-8% annually the total returns improve significantly. Our calculator helps you compute both gross yield based on rent versus property value and net yield after deducting maintenance taxes insurance and vacancy periods.
What is a good rental yield in India?
A rental yield above 3% is considered decent in Indian metros. Bangalore and Pune offer better yields averaging 3.5-4.5% while Mumbai has the lowest at 2-3% due to extremely high property prices. For comparison commercial properties typically offer 6-8% rental yield but require larger investment and carry higher risk.
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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 |
|---|---|
| Mumbai Avg Rental Yield | 2.0% - 3.0% |
| Bangalore Avg Rental Yield | 3.0% - 4.5% |
| Delhi NCR Avg Rental Yield | 2.5% - 3.5% |
| Pune Avg Rental Yield | 3.5% - 4.5% |
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Use Calculator NowFrequently Asked Questions
What is a good rental yield in India?
A rental yield above 3% is considered decent in Indian metros. Bangalore and Pune offer better yields averaging 3.5-4.5% while Mumbai has the lowest at 2-3% due to extremely high property prices. For comparison commercial properties typically offer 6-8% rental yield but require larger investment and carry higher risk.
How do I calculate rental yield?
Gross rental yield is calculated as Annual Rent divided by Property Value multiplied by 100. For example if your flat worth Rs 50 lakh earns Rs 18000 monthly rent the annual rent is Rs 2.16 lakh giving a gross yield of 4.32%. Net yield subtracts expenses like maintenance society charges property tax insurance and vacancy loss from the annual rent before dividing.
Is rental income taxable in India?
Yes rental income is fully taxable in India under Income from House Property. However you get a standard deduction of 30% on the gross rent for repairs and maintenance without needing to show actual expenses. You can also deduct home loan interest up to Rs 2 lakh for a self-occupied property or the entire interest for a rented property.
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