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Rental Yield Calculator — Calculations & Slabs for FY 2026-27

Enter your property's purchase price and monthly rent to compute the gross and net rental yield and see how it compares to FD and equity returns.

1. Investment Profile

Frequently Asked Questions (FAQ)

What is rental yield and why does it matter?

Rental yield is the annual rental income generated by a property expressed as a percentage of its total purchase cost. It is a critical metric for real estate investors to compare cash flow yields across different properties and asset classes.

What is the difference between Gross and Net rental yield?

Gross rental yield is calculated using your raw annual rental income without subtracting expenses. Net rental yield accounts for vacancy periods, annual maintenance, property taxes, insurance, and other property management expenses, offering a true picture of your returns. This ensures full compliance with the latest regulations, allowing you to estimate values correctly and avoid common filing errors.

What is a healthy rental yield in India?

In India, residential rental yields are typically low, averaging around 2% to 3% in major cities like Mumbai, Delhi, and Bangalore. Commercial real estate offers much higher rental yields, generally ranging from 7% to 10%. This ensures full compliance with the latest regulations, allowing you to estimate values correctly and avoid common filing errors.

How is the property payback period calculated?

The payback period is the number of years it takes to recover the purchase price of the property from its net rental income. It is calculated by dividing the total Property Value by the Net Annual Rental Income (Rent minus Maintenance and Taxes).

Where can I verify the source data for this calculator?

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.

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About This Calculator

Target Audience: Salaried taxpayers, investors & retirees planning Indian tax & wealth growth

What Does This Calculator Do?

This calculator determines the gross and net rental yields of a real estate property, helping you evaluate whether it is a profitable investment. It incorporates annual expenses like maintenance, property taxes, and vacancy periods to find the net yield and estimated payback period.

How to Use It

  1. Property Value (₹): Enter the purchase price or current market value of the property.
  2. Monthly Rent (₹): Enter the expected monthly rent.
  3. Annual Maintenance (₹): Enter yearly upkeep, repair, and society maintenance charges.
  4. Property Tax Annual (₹): Enter the yearly municipal property tax paid.
  5. Vacancy Period (Months/Year): Enter the expected number of months the property remains unoccupied between tenants.

The Logic Explained Simply

  • The Concept: Rental yield represents the annual return on a property investment, expressed as a percentage of its value. While gross yield only looks at raw rent income, net yield accounts for maintenance costs, taxes, and vacancy losses, giving a realistic picture of your actual cash flow.
  • The Formula:
  • Annual Gross Rent = Monthly Rent × (12 - Vacancy Months)
  • Gross Rental Yield (%) = (Annual Gross Rent / Property Value) × 100
  • Net Annual Income = Annual Gross Rent - Annual Maintenance - Annual Property Tax
  • Net Rental Yield (%) = (Net Annual Income / Property Value) × 100
  • Payback Period (Years) = Property Value / Net Annual Income

Real-World Calculation Breakdown

Suppose you purchase a residential apartment in Pune for ₹80,00,000, rent it out for ₹25,000 per month, pay annual maintenance of ₹30,000 and property tax of ₹15,000, and assume a 1-month vacancy rate:

  • Active rental months = 12 - 1 = 11 months
  • Annual Gross Rent = ₹25,000 × 11 = ₹2,75,000
  • Gross Yield = (₹2,75,000 / ₹80,00,000) × 100 = 3.44%
  • Net Annual Income = ₹2,75,000 - ₹30,000 - ₹15,000 = ₹2,30,050
  • Net Yield = (₹2,30,000 / ₹80,00,000) × 100 = 2.88%
  • Payback Period = ₹80,00,000 / ₹2,30,000 = 34.8 years

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