Rental Yield Calculator
Rental yield is the income a property earns as a percentage of what it costs. It is the quickest way to compare one rental property with another, or with other investments.
Results
Gross rental yield
4.4%
- Net rental yield
- 2.98%
- Annual rent
- ₹2,64,000
- Net income per year
- ₹1,90,800
- Net income per month
- ₹15,900
Rent of ₹2,64,000 a year on ₹60,00,000 is a gross yield of 4.4%. After vacancy and expenses the net yield is 2.98% (₹1,90,800 a year).
Show the calculation steps
- Annual rent = ₹22,000 × 12 = ₹2,64,000. Gross yield = annual rent ÷ price × 100 = 4.4%.
- Vacancy allowance = 5% × ₹2,64,000 = ₹13,200; expenses = ₹60,000.
- Net income = ₹2,64,000 − ₹13,200 − ₹60,000 = ₹1,90,800.
- Net yield = net income ÷ (price + buying costs) × 100 = ₹1,90,800 ÷ ₹64,00,000 × 100 = 2.98%.
- Yield is the income return only; it ignores price growth and mortgage costs. Include property tax, maintenance, insurance and agent fees in the yearly expenses.
Gross and net yield
Gross yield uses the full rent and the price alone. Net yield subtracts vacancy and expenses and includes buying costs in the amount invested, so it is a truer measure of what you keep.
What is a good yield?
Residential yields are often modest compared with fixed deposits, and investors are usually counting on price growth too. Compare net yield with what you could earn elsewhere, and remember that property is illiquid.
Formula
Gross yield = Annual rent ÷ Property price × 100
Net income = Annual rent − vacancy − yearly expenses
Net yield = Net income ÷ (Price + buying costs) × 100
Where:
- Annual rent
- = Monthly rent × 12
Example calculation
₹60 lakh flat renting for ₹22,000 a month
Inputs
- Property Price
- ₹60,00,000
- Buying Costs
- ₹4,00,000
- Monthly Rent
- ₹22,000
- Vacancy Allowance
- 5 % of rent
- Yearly Expenses
- ₹60,000
Result
- Gross rental yield
- 4.4%
- Net rental yield
- 2.98%
- Annual rent
- ₹2,64,000
- Net income per year
- ₹1,90,800
- Net income per month
- ₹15,900
Step-by-step
- Annual rent = ₹22,000 × 12 = ₹2,64,000. Gross yield = annual rent ÷ price × 100 = 4.4%.
- Vacancy allowance = 5% × ₹2,64,000 = ₹13,200; expenses = ₹60,000.
- Net income = ₹2,64,000 − ₹13,200 − ₹60,000 = ₹1,90,800.
- Net yield = net income ÷ (price + buying costs) × 100 = ₹1,90,800 ÷ ₹64,00,000 × 100 = 2.98%.
Important notes
- Yield is income only; it excludes price growth and any loan costs.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
How is rental yield calculated?
Gross yield = annual rent ÷ property price × 100. Net yield subtracts costs from the rent first.
What are typical rental yields?
They vary by city and property. Compare with other properties in your area.
Does yield include price appreciation?
No. Use the property ROI calculator to include it.
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