How to use this calculator
Buying a rental property without knowing the yield is like buying a business without seeing the P&L. This calculator gives you the four numbers that matter most to property investors — gross yield, net yield, cash-on-cash return, and total ROI over your holding period — in one place, updating instantly as you adjust inputs.
Step-by-step
- Enter the purchase price of the property and select your currency.
- Enter the monthly rental income — use the actual rent or a realistic market estimate based on comparable properties.
- Enter annual expenses: add up property tax, maintenance, insurance, and any management fees. A rough benchmark is 1–2% of property value per year for a well-maintained property.
- Enter your cash invested — typically the down payment plus closing/registration costs. This is used for the cash-on-cash return figure. Set it equal to the purchase price for an all-cash deal.
- Set your expected annual appreciation — use local market history as a guide, not optimism. The projection table shows how sensitive your total return is to this assumption.
Understanding the four yield metrics
Gross rental yield is the simplest cut: annual rent divided by purchase price. It ignores costs entirely. Useful for a quick comparison between properties before doing deeper analysis.
Net rental yield subtracts annual expenses from rental income before dividing by price. This is the number that actually tells you how productive the asset is. Net yields above 6% are generally considered strong in most markets. 4–6% is average. Below 4% means you're counting heavily on appreciation.
Cash-on-cash return measures annual net cash flow against the actual cash you put in (down payment + costs). If you financed 70% of the purchase, your cash invested is much less than the purchase price — which can make a modest net yield look very attractive on a cash-on-cash basis.
Annual cash flow is the raw number: rental income minus expenses. A negative cash flow property is not automatically bad — it may still deliver strong total returns through appreciation — but you need to fund that shortfall each month, so model it honestly.
Reading the projection table
The 5/10/20-year projections combine cumulative net rental income with capital appreciation. The CAGR (annualised return) row is the most useful single number for comparing this investment to alternatives like equities or bonds. Note that the projection assumes constant rent, constant expenses, and constant appreciation — all of which will vary in reality. Use it for directional clarity, not precision.
What makes a good rental investment?
- Net yield above fixed deposit rates: If your net yield is below a risk-free FD or savings rate, you're not being compensated for illiquidity and management effort.
- Positive cash flow from day one: Even a small positive cash flow is preferable to relying entirely on appreciation, which is uncertain.
- Location with rental demand: Near tech parks, universities, hospitals, or business districts. Vacancy is the killer of rental yield in practice.
- Low maintenance cost profile: Newer properties and reputable builders typically have lower annual expense ratios in the first 10 years.
How this compares to generic AI tools
Generic AI assistants can produce real estate copy, but you have to know how to prompt them. Our tools have that prompt engineering built in.
| Feature | Generic AI Tools | EstateAITools |
|---|---|---|
| Industry-specific prompts | Generic | Real estate calibrated |
| Output format | Variable | MLS-ready / structured |
| Currency support | Manual | INR, USD, GBP, AED, AUD |
| Audience calibration | Manual | Built-in |
| Signup required | Often yes | Never |
| Cost | Subscription | Free |
Related tools
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Common questions
What's a good rental yield in India?
Residential rental yields in Indian metros typically range from 2–4% gross. Hyderabad and Bengaluru tech corridors can reach 3.5–5% in high-demand micro-markets near offices. Commercial properties (offices, retail) typically yield 6–10% gross. Net yields after expenses are usually 1–2 percentage points lower. Compare against the current FD rate (~7%) when evaluating — if your net yield is below that, the investment case rests primarily on appreciation.
What should I include in annual expenses?
Property tax (varies by city and property type), annual maintenance charges (society/apartment fees), insurance premium, any property management fees (typically 8–10% of monthly rent if using an agency), and a vacancy allowance (budget 1–2 months of empty rent per year). Do not include mortgage EMI — that is a financing cost, not an operating expense, and is already captured in the cash-invested field.
How is cash-on-cash return different from net yield?
Net yield compares income to the full purchase price regardless of how you financed it. Cash-on-cash return compares income to the actual cash you invested (typically just the down payment if you took a loan). For a leveraged purchase, cash-on-cash will be higher than net yield — sometimes dramatically so. Both numbers are useful: net yield tells you about the asset's productivity, cash-on-cash tells you about your capital efficiency.
Does the projection account for rent increases over time?
No — the projection uses constant rent and expenses for simplicity and conservatism. In practice, rents tend to increase over time (typically 3–8% annually in growing Indian cities), which would make the actual total return higher than shown. Treat the projection as a conservative floor.
Should I factor in taxes on rental income?
This calculator shows pre-tax returns. In India, rental income is taxed as income at your slab rate, with a 30% standard deduction on net rent allowed. Capital gains on sale are taxed separately (LTCG at 12.5% without indexation for property held over 2 years, as of 2024). For accurate post-tax returns, consult a CA — the numbers vary significantly based on your income bracket and holding period.
What appreciation rate should I use?
Use historical data for the specific micro-market if available. As a benchmark: Indian residential property in metro cities has appreciated 5–8% annually over the past decade, with outliers (Gachibowli, Whitefield, Hinjewadi) seeing 10–15% in boom years. For a conservative base case, use 4–5%. For an optimistic case, 8–10%. The difference between these assumptions dominates the 20-year projection — which is exactly why the table is useful to show investors.