FinCalc

Rental Yield Calculator

Find gross and net rental yield on property

₹
₹
₹
Months

Net Yield

3.06%

Gross Yield

3.75%

Monthly Net Income

₹20,417

Annual Rent₹2,75,000
Annual Maintenance-₹30,000
Vacancy Loss-₹25,000
Net Annual Income₹2,45,000
Property Value₹80,00,000
Net Yield3.06%

What is a Rental Yield Calculator?

Rental yield measures how much income a property generates as a percentage of its value — essentially, the return on investment for rental property. In India, residential rental yields are notoriously low (1.5-3%), especially in expensive metros, which is why buying property purely as an investment often underperforms other asset classes.

This calculator computes both gross yield (rent ÷ property value) and net yield (after deducting maintenance, property tax, vacancy, and repairs). Net yield gives you the true picture of rental income returns and helps you decide whether a property makes sense as an investment.

When to Use This Calculator

  • Evaluating a property's investment potential before buying for rental income
  • Comparing rental yields across different properties or cities
  • Setting a fair rent — ensuring your asking rent matches market yields
  • Deciding whether to sell an underperforming rental property and invest elsewhere
  • Calculating returns for commercial vs residential rental properties

Key Terms

Gross Rental Yield

Annual rent ÷ Property value × 100. Doesn't account for expenses. Indian metro residential yields are typically 1.5-3%.

Net Rental Yield

(Annual rent − Annual expenses) ÷ Property value × 100. Expenses include maintenance, property tax, insurance, vacancy cost, and repairs. Usually 0.5-1% lower than gross yield.

Cap Rate

Capitalization rate — similar to net yield, used more in commercial real estate. A higher cap rate indicates higher risk and higher potential returns.

Vacancy Rate

The percentage of time a property remains unoccupied between tenants. In India, expect 1-2 months vacancy every 2-3 years, which is about 3-8% of annual rent.

Frequently Asked Questions

What's a good rental yield in India?+
For residential property: 2-3% is average, 3-4% is good. For commercial property: 6-8% is typical. For comparison, a bank FD gives 7% with zero hassle. Indian rental yields are among the lowest globally, which makes buying property purely for rent less attractive than other investments.
Why are Indian rental yields so low?+
Property prices in India are high relative to rents because of: (1) cultural preference for ownership driving up prices, (2) limited rental demand in many areas, (3) strong appreciation expectations that make owners willing to accept low yields, (4) lack of rental housing policy. In most metros, you'd earn more on an FD than on rental income from the same capital.
Should I account for property appreciation along with rental yield?+
Yes. Total return on property = Rental yield + Appreciation. Even a 2% rental yield becomes attractive if the property appreciates at 6-7%. But don't double-count: if you're comparing with mutual funds, compare total property return (rent + appreciation) with total fund return (CAGR).
How do I increase rental yield?+
You can: (1) furnish the property — furnished homes command 20-40% higher rent, (2) add amenities like AC, modular kitchen, (3) target short-term/co-living rentals (higher yield but more effort), (4) convert to commercial use if zoning allows. Or the best option: buy in areas with high rental demand relative to property price.