Rental Yield Calculator (Gross and Net Yield)
This rental yield calculator shows the rent a property earns as a share of what it cost. Enter the price, the rent and what you pay to keep it let, and it shows the gross yield, the net yield after costs and how it compares with a fixed deposit of the same amount.
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Calculator and results
A rent of ₹25,000 a month on ₹80,00,000 is a gross yield of 3.75%. After 1 vacant month and ₹74,000 a year in costs, the net yield is 2.51%, or ₹2,01,000 a year. An FD of the same amount at 6.5% would pay ₹5,20,000, so the rent earns ₹3,19,000 less before tax.
Stamp duty, registration and brokerage you paid to buy. Including them gives the yield on all the money you put in.
Time between tenants. An assumption; one month a year is a common planning figure.
Society maintenance and repairs you pay as the owner.
From your municipal property tax bill.
Brokerage, rent agreement and agent fees, spread over a year.
Enter the rate your bank offers for a deposit of this size.
Net rental yield
2.51%
after vacancy and costs
Gross rental yield
3.75%
12 months of rent
Net income a year
₹2,01,000
₹16,750 a month
FD interest a year
₹5,20,000
at 6.5%, before tax
Rent trails FD by
₹3,19,000
a year, before tax
Vacancy and costs
₹99,000
₹25,000 rent lost
Before tax
Both the rent and the FD interest are taxable at your slab rate, so the comparison above is before tax. Rental yield also leaves out any change in the property's price, which can add to or take away from the return.
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Net rental yield
2.51%
- What it is:
- A calculator for the income return on a let residential property in India.
- What it calculates:
- Gross rental yield, net rental yield after vacancy and owner's costs, net income a month, and the gap against an FD of the same amount.
Key Assumptions
- Rent and costs are steady over the year.
- Yields are before income tax; rent and FD interest are both taxable.
- Home loan interest, if any, is not deducted; the yield is on the whole property cost.
- Changes in the property's price are not included.
How does the Rental Yield Calculator work?
Gross yield is twelve months of rent divided by the money tied up in the property: the price plus any purchase costs you enter, such as stamp duty, registration and brokerage.
Net yield takes out what the property costs to own and let: the months it sits empty, society maintenance and repairs, property tax, insurance and letting costs such as brokerage and the rent agreement.
The FD comparison shows the interest a fixed deposit of the same amount would earn in a year at the rate you enter. Both figures are before income tax, so compare like with like.
Rental yield leaves out any rise or fall in the property's price. A low yield can still make sense if you expect the price to grow, but that growth is not guaranteed.
Worked example: a flat bought for ₹80,00,000 plus ₹6,00,000 of stamp duty, registration and brokerage, let at ₹25,000 a month, has a gross yield of 3.49%. With one month empty a year and ₹61,500 of yearly costs (maintenance, property tax, insurance and letting), the net yield is 2.48%. The same ₹86 lakh in an FD at 6.5% would earn ₹5,59,000 a year before tax, more than twice the net rent.
Residential yields in large Indian cities are often only 2% to 4%, so most of a flat's return has to come from its price rising, which is not guaranteed. Shops and offices usually yield more, but stay empty longer between tenants. To see the full cost of owning, check the Rent vs Buy Calculator and the Home Loan EMI Calculator.
Gross rental yield by price and monthly rent
| Property price | ₹15,000 rent | ₹25,000 rent | ₹40,000 rent | ₹60,000 rent |
|---|---|---|---|---|
| ₹50 lakh | 3.60% | 6.00% | 9.60% | 14.40% |
| ₹80 lakh | 2.25% | 3.75% | 6.00% | 9.00% |
| ₹1 crore | 1.80% | 3.00% | 4.80% | 7.20% |
| ₹1.5 crore | 1.20% | 2.00% | 3.20% | 4.80% |
Gross yield = monthly rent × 12 ÷ price × 100, before purchase costs, vacancy and running costs. Net yield is usually about 1 percentage point lower.
Rental Yield Calculator formula
Gross yield = R x 12 / (P + C) x 100; Net yield = (R x (12 - v) - Costs) / (P + C) x 100
- R
- = monthly rent
- P
- = property price
- C
- = purchase costs such as stamp duty and registration
- v
- = vacant months a year
- Costs
- = annual maintenance, property tax, insurance and letting costs
FD interest for comparison = (P + C) x FD rate / 100, before tax.
Rental Yield Calculator: worked example
A ₹80,00,000 flat let at ₹25,000 a month
- Rent for 12 months
- ₹3,00,000
- Gross yield
- 3.75%
- Rent lost to 1 vacant month
- ₹25,000
- Maintenance, property tax, insurance and letting costs
- ₹74,000
- Net income a year
- ₹2,01,000
- Net yield
- 2.51%
- FD interest at an assumed 6.5%
- ₹5,20,000
Rental Yield Calculator: frequently asked questions
What is the difference between gross and net rental yield?
What is a good rental yield?
Should I include stamp duty in the purchase cost?
Is rental income taxed?
Why does the net yield turn negative?
How do I calculate rental yield?
Further reading
On the same money and the same return, a lumpsum wins on arithmetic. Why a SIP is still the right answer for most people in India.
Comprehensive comparison between Mutual Fund SIPs and Bank Fixed Deposits in India. Compare after-tax returns, volatility, inflation beating, and liquidity.
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Reviewed by Pradipta Ray, MBA (Finance) · Updated