Rental Yield Calculator

Understanding Rental Yield

Rental yield helps you measure the return on investment from rental income. It's a key metric for real estate investors:

Gross Rental Yield: Annual rent ÷ Property value × 100
Net Rental Yield: (Annual rent - Expenses) ÷ Property value × 100
Higher yields indicate better investment returns
Consider both yield and capital appreciation for complete analysis

Property Details

Yield Analysis

Frequently Asked Questions

Common questions about rental yield and how to evaluate a buy-to-let investment.

What is rental yield and how is it calculated?

Rental yield is the annual rental income expressed as a percentage of the property's purchase price. Gross yield = (Annual Rent ÷ Property Value) × 100. Net yield subtracts ongoing costs like maintenance, property tax, and vacancy periods from the annual rent before dividing.

What is the difference between gross and net rental yield?

Gross yield uses total rental income before expenses. Net yield deducts annual costs — maintenance, property management, insurance, property tax, and periods when the property is vacant. Net yield gives a more realistic picture of actual returns.

What is considered a good rental yield in Bangalore?

For residential properties in Bangalore, gross yields typically range from 2% to 4%, with well-located apartments in high-demand corridors like Whitefield, Sarjapur Road, and Hebbal achieving the higher end. Yields above 4% are considered strong for the city.

Does rental yield vary by property type?

Yes. Smaller units (1 BHK, 2 BHK) tend to deliver higher rental yields relative to their purchase price compared to larger luxury units or villas. Commercial properties and co-living spaces often command higher yields but come with different risk profiles.

Should I look at rental yield or capital appreciation?

Ideally both. High-yield properties in peripheral areas may offer lower capital appreciation, while premium central locations offer lower yields but stronger long-term appreciation. The right balance depends on whether you need regular income now or are building long-term wealth.

Does a home loan affect rental yield?

Yes. If you finance the property with a home loan, your EMI outgo reduces the effective net return. A leveraged yield comparison should factor in interest costs against rental income to assess whether the investment is cash-flow positive or negative.