Key Components to Calculate
- Property Value: Total acquisition cost, including purchase price, registration fees, stamp duty, and renovation costs.
- Annual Rental Income: Total yearly income, considering vacancy periods.
- Annual Expenses: Maintenance charges, property taxes, insurance, and repairs.
Rental Yield Types
- Gross Rental Yield = (Annual Rent / Property Value) × 100%
- Net Rental Yield = (Annual Rent - Expenses) / Property Value × 100%
Example Calculation
If a property costs ₹50 Lakhs and generates ₹15,000 in monthly rent (₹1.8 Lakhs annually):
If a property costs ₹50 Lakhs and generates ₹15,000 in monthly rent (₹1.8 Lakhs annually):
- Gross Yield: .
A higher yield is generally preferred, often over
to make it competitive with other investment options like bank fixed deposits.