What is a good rental yield in India?

Residential yields of 3% or more are above average in big cities. Commercial property often yields 6–9% but carries higher vacancy risk.

Is a 3% yield worth it when FDs pay 7%?

Only if you expect price appreciation. Total return = rental yield + appreciation − costs. Use the CAGR calculator to evaluate past appreciation.

Rental Yield Calculator India – Gross & Net Yield

Rental yield tells you the annual return a property earns from rent alone. Indian residential yields are typically 2–4%; commercial yields run higher.

Net rental yield

2.84%

Gross rental yield: 3.6%
Net annual rental income: ₹2,84,000
Rent collected (after vacancy): ₹3,30,000
Annual expenses: ₹46,000
Years to recover price from rent: 35.2

Formula

Gross yield = Annual rent ÷ Property value × 100. Net yield = (Rent collected − Expenses) ÷ Property value × 100.

Worked example

₹1 crore flat renting at ₹30,000 a month with one vacant month and ₹46,000 of yearly costs: gross yield 3.6%, net yield 2.84%.

Assumptions

Rental income tax, loan interest and capital appreciation are not included.
Rent is assumed flat for the year.

Frequently asked questions

What is a good rental yield in India?: Residential yields of 3% or more are above average in big cities. Commercial property often yields 6–9% but carries higher vacancy risk.
Is a 3% yield worth it when FDs pay 7%?: Only if you expect price appreciation. Total return = rental yield + appreciation − costs. Use the CAGR calculator to evaluate past appreciation.

Last reviewed 2026-10-31. Results are estimates for information only and do not constitute financial, tax or legal advice.