Rental Yield Calculator

Rental yields in India: Mumbai 2–3%, Delhi-NCR 2.5–3.5%, Bengaluru 3–4%, Chennai 3–4.5%, Hyderabad 3–4%, Pune 3–4.5%. Yields have been declining as property prices appreciate faster than rents. Tier-2 cities offer higher yields (4–6%) but lower liquidity. Compare always against risk-free rate (FD at 7–8% currently offers better yield with zero illiquidity risk).

Gross yield = Annual rent / Property value. Net yield accounts for: maintenance cost (1–1.5% of property value annually), vacant months (typically 1–2 months per year), property management fee (8–10% of rent), property tax (varies by area), and income tax on rental income (taxed at slab rate with 30% standard deduction). Net yield is typically 30–40% lower than gross.

Rental income is taxable as 'Income from House Property'. Deductions: 30% standard deduction on net annual value, and interest on home loan (entire interest deductible for let-out property, not capped at ₹2L unlike self-occupied). Net rental income is added to total income and taxed at applicable slab rate. Municipal tax paid is also deductible.

Sell if: rental yield below FD rate after tax and opportunity cost, property has significant appreciation and you can redeploy capital at higher return, maintenance costs are escalating, tenant quality is declining, or you need the capital for a higher-priority goal. Don't hold property indefinitely out of emotional attachment — treat it as an investment.

Yield improvement: light renovation increases rent 15–25% (paint, flooring, fixtures for ₹1–3 lakhs), furnished rental increases by 20–40%, upgrade to Airbnb or corporate rental (2–3× yield but higher management involvement), add a separate room or utility space, and negotiate rent increase at lease renewal (standard 10–15% every 2 years in Indian market).