Rental Yield Calculator
Is this property a good investment? Net yield, payback and total return, judged honestly.
Property details
Maintenance, property tax, insurance, vacancy
Results update live — calculations run in your browser, no signup.
3.0%
3.8% gross before costs — you keep ₹20,000/mo after ₹60,000/yr of expenses
This is a average residential yield. Net rent alone recovers the ₹80L price in about 33 years (21y 7m if rent grows 4.0%/yr). Add the 6.0% price growth and the total return rises to 9.0%.
Assumes rent grows 4.0%/yr and the price 6.0%/yr — assumptions, not guarantees. Excludes financing and tax.
Every ₹100 of rent collected
How much of the rent you keep after running costs — and what that looks like over a year and the full holding period.
- Net income kept
- Expenses
- ₹80Net income kept
- ₹20Expenses
- ₹2.40 LNet income kept
- ₹60,000Expenses
- ₹28.81 LNet income kept
- ₹6.00 LExpenses
You keep about ₹80 of every ₹100 in rent — expenses eat 20%. The lower your costs, the higher your net yield.
Cumulative net rental income
Net rent kept, building up year by year as rent grows 4.0%/yr.
Year 3
₹7.49L
Year 5
₹13.00L
Year 8
₹22.11L
Year 10
₹28.81L
Year-by-year rental income
Rent and net income each year, with rent growing at 4.0%, alongside the running cumulative net income.
| Year | Rent that year | Net income that year | Cumulative net income |
|---|---|---|---|
| Year 1 | ₹3.00 L | ₹2.40 L | ₹2.40 L |
| Year 2 | ₹3.12 L | ₹2.50 L | ₹4.90 L |
| Year 3 | ₹3.24 L | ₹2.60 L | ₹7.49 L |
| Year 4 | ₹3.37 L | ₹2.70 L | ₹10.19 L |
| Year 5 | ₹3.51 L | ₹2.81 L | ₹13.00 L |
Where your net yield lands
Your 3.0% net yield on a typical residential scale — illustrative bands, not a rule.
How your yield compares on income
Income yields on the same money against typical reference rates — not guarantees. Inflation is the red baseline returns must clear.
FD income
risk-free, taxable
Inflation
erodes value
Your net yield
this property
Rental market
typical residential net
0.5% above the typical residential market · 4.0% below a ~7.0% FD's income
Residential rental yields rarely beat a fixed deposit on income alone — property's case rests on appreciation and leverage, not rent.
Total return over 10 years
Yield is only the income half. Add the equity built by price growth for the return property investors actually chase.
₹28.81 L
cumulative income, after expenses
₹63.27 L
value: ₹80L → ₹1.43Cr
₹92.08 L
9.0% combined p.a.
At 9.0% combined, this edges past a ~7.0% FD and compares to ~12.0% long-run equity — but the 6.0% appreciation is an assumption, not a guarantee, and varies hugely by location and market cycle.
₹80L invested today — value after 10 years
Property (appreciation + rent kept) against the same money compounding in a fixed deposit.
Property value
at 6.0%/yr growth
+ Net rent kept
cumulative, after expenses
FD on same money
7.0% compounded
Original price
what you paid
FD figure is an illustrative 7.0% compounded return, not a live quote. Property value and rent assume the growth rates you entered, which are not guaranteed. Both rental income and FD interest are taxable; rules differ. For comparison only.
Rental yield vs FD — income only
If the ₹80L sat in a ~7.0% FD instead, on income alone.
₹2.40L/yr
₹5.60L/yr
FD pays ₹3.20 L more/yr
But the FD's principal stays flat, while this property may add ~₹4.80L/yr at 6.0% appreciation — that growth, not the rent, is usually where property wins.
- You keep ₹80 of every ₹100 of rent after costs.
- Net rent alone repays the price in about 33 years.
- Add 6.0% price growth and the total return is 9.0% p.a.
What this means
A ₹80,00,000 property renting at ₹25,000/mo yields 3.0% net after ₹60,000 of expenses — a average residential yield. The rent recovers the price in about 33 years. On income alone an FD would pay ₹3.20 L more a year; property's edge has to come from the 6.0% price growth, lifting the total return to 9.0% — if that appreciation actually materialises.
Key takeaways
- Net rental yield: 3.0% (Average)
- Net income: ₹2,40,000/yr (₹20,000/mo)
- Payback period: 33 years
- Total return with growth: 9.0% p.a.
- FD on the same money: ₹5.60 L/yr income
Start investing in mutual funds
Open a free account with ICICI Prudential AMC and start an SIP online. ICICI Prudential Mutual Fund, at no extra cost to you.
Your property: ₹80.00 L renting at ₹25,000/mo → 3.0% net yield.
Plan the rest of the purchase
Financing it, renting vs owning, or parking the same money elsewhere — run the numbers.
Rental yield measures income only— it ignores the property's price change, which is where most of a property's return usually comes from. The total-return figure adds your assumed 6.0% appreciation, but that is an estimate, not a promise: prices fall as well as rise and vary by location and cycle. Payback and yield also ignore financing — a mortgage changes the picture entirely. Benchmark rates (FD ~7.0%, inflation ~6.0%, rental market ~2.5%) are typical long-term reference figures, not guarantees, and rental income is taxable. Use this as a planning estimate, not advice.
How rental yield is calculated
Net yield = (Annual rent − Expenses) ÷ Price × 100
- Annual rent
- monthly rent × 12
- Expenses
- yearly running costs — maintenance, tax, insurance, vacancy
- Price
- the property's purchase price
Worked example
With your inputs — ₹25,000/month rent on a ₹80.00 L property: annual rent is ₹3.00 L; subtracting ₹60,000 of expenses leaves ₹2.40 L of net income a year. Divided by the price, that is a net yield of 3.0% (3.8% gross before costs), and the payback period — price ÷ net income — is about 33 years.
Most asked rental yield questions
There is no universal threshold — it depends on the city, property type and interest rates at the time. As a rough guide for residential property, a net yield under ~2% is poor, 2–4% is average, 4–6% is good and above 6% is strong (commercial property often yields more). Yields are usually lower in expensive metros where buyers expect most of their return from price appreciation, and higher in smaller cities. The honest test is to compare the net yield against a risk-free fixed deposit and against the typical market for that area.
Gross yield is annual rent divided by the property price, before any costs — a quick headline number. Net yield subtracts the running costs of owning the property (maintenance, property tax, insurance, vacancy, management fees) from the rent first, so it reflects what you actually keep. Net yield is always lower than gross and is the figure that matters when comparing a property against other investments.
Residential rental yields are often below fixed-deposit rates because property buyers are paying partly for expected capital appreciation, not just rent. That is why total return — rental yield plus price growth — is the number that matters, and why this page shows it. A 3% yielding flat that appreciates 6% a year delivers a 9% total return, ahead of an FD; but appreciation is not guaranteed and varies enormously by location and market cycle.
Payback period is how many years of net rent it takes to recover the property's price — price divided by annual net income. It is a simple, intuitive measure of how 'income-efficient' a property is: a 33-year payback means the rent alone takes a third of a lifetime to repay the cost. It ignores appreciation and rent growth (which shorten it) and financing (which can lengthen it), so treat it as a yardstick, not a full return.
Include every recurring cost of holding the property: maintenance and repairs, property tax, building or society charges, insurance, any management or letting fees, and an allowance for vacancy when the property sits empty between tenants. This calculator takes those as a single annual expenses figure. It does not include your mortgage repayments — yield measures the property's own return, separate from how you financed it.
No. Rental yield measures only the income return — the rent you collect relative to the property's value, and it deliberately ignores any change in price. Your total return as an owner is the rental yield plus (or minus) capital appreciation, so a low-yield property can still be a strong investment if its value is rising. The 'total return' section on this page combines the two; enter a realistic appreciation rate for your market.
The complete guide to rental yield
Is this property a good investment?
Rental yield turns a property into a number you can compare with any other income investment. Gross yield is a year's rent divided by the price; net yield strips out the running costs first and is the figure that matters. As a rough residential guide, under 2% is poor, 2–4% average, 4–6% good and above 6% strong — but the honest test is always against a risk-free fixed deposit and the typical market for that area.
Why yield alone misleads
Most residential yields sit below fixed-deposit rates, which makes property look like a poor income asset — until you add capital appreciation. Total return is rental yield plus price growth, and for most buyers the growth is the bigger half. A 3% yield with 6% appreciation is a 9% total return, ahead of an FD; the same yield with flat prices is not. That is why this page shows both, and why you should enter a realistic, not hopeful, appreciation rate.
Payback period
Payback is how many years of net rent it takes to recover the price — a simple gauge of income efficiency. A 33-year payback means rent alone takes a third of a working life to repay the cost. Rent growth and appreciation shorten the real recovery; a mortgage lengthens it. Treat payback as an intuitive yardstick that sits alongside yield and total return, not a complete measure of return.
Costs, vacancy and tax
Net yield is only as honest as the expenses you feed it. Include maintenance, property tax, society charges, insurance, letting fees and a realistic vacancy allowance for the weeks a property sits empty between tenants. Rental income is taxable, with rules that differ by country and can include deductions for interest and a standard maintenance allowance — so your in-hand yield is usually a little lower than the pre-tax figure shown here.