Rental yield calculator
What an investment property actually returns once society maintenance, property tax and a month of vacancy are taken out of the headline rent.
One month between tenants is a realistic assumption.
Net rental yield
2.95%
- Rent if never vacant
- ₹6,60,000
- Rent actually collected
- ₹6,05,000
- Maintenance and tax
- −₹60,000
- Net income a year
- ₹5,45,000
- Gross yield
- 3.57%
- Net yield
- 2.95%
Residential yields in Mumbai typically land between two and four per cent net. Investors chasing yield alone usually do better in commercial; residential returns come mostly from appreciation.
Gross is the number people quote
Net is the number they receive. Maintenance on a Mumbai tower runs to several thousand a month, property tax is annual, and a single month between tenants removes about eight per cent of the year's rent. Together they routinely take a full percentage point off the figure quoted in the advertisement.
If the client is financing the purchase, run the EMI alongside it — a yield below the borrowing rate means the property costs money to hold, which is a perfectly reasonable decision but should be a conscious one.
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Common questions
- How is rental yield calculated?
- Gross yield is annual rent divided by the property value, as a percentage. Net yield subtracts the running costs — society maintenance, property tax — and allows for months the flat sits empty.
- What is a good rental yield in Mumbai?
- Residential yields in Mumbai typically land between two and four per cent net, which is low by global standards. Most of the return on Indian residential property comes from appreciation rather than rent.
- Why is net yield so much lower than gross?
- Society maintenance in a Mumbai tower is substantial, property tax is annual, and a month between tenants removes roughly eight per cent of the year’s rent. Together they often take a full percentage point off the headline figure.
- Should I buy for yield or for appreciation?
- Residential in Mumbai rarely produces a strong yield; commercial and smaller-ticket residential in outer suburbs generally do better on rent. Decide which return you are buying before you compare properties.