Calculate gross + net rental yield on residential or commercial property. Factors in maintenance, property tax, vacancy rate, and TDS on rent. Compares against FD return so you can decide if real estate is the right asset class for the capital.
Reviewed by the CalculatorKosh Editorial TeamUpdated June 2026Free · No sign-up
Rental Yield Calculator
Calculate gross + net rental yield on residential or commercial property. Factors in maintenance, property tax, vacancy rate, and TDS on rent. Compares against FD return so you can decide if real estate is the right asset class for the capital.
Property & Rent
Purchase price (or current market value) of the property
Gross rent before TDS or any deductions
Society charges + repairs paid by owner
Municipal tax paid by owner (deductible under Sec 23)
Months vacant per year. 8% ≈ ~1 month/year unoccupied
Sec 24(b) — fully deductible for let-out property
Net Rental Yield
on ₹1.50 Crore2.37%
Post-tax 1.82% · vs FD-equivalent 4.90%
Gross yield
2.69%
Net yield
2.37%
Post-tax yield
1.82%
vs FD differential
-3.08%
Yield Ladder
Lags FD
At your tax slab, a 7% FD would give 4.90% post-tax. Pure rental return is 3.08% below that — property appreciation has to make up the rest of your return.
Why residential rental yields are typically low
Residential rents in major metros run at 2–4% of property price versus 5–7% in mature global markets. The thesis is capital appreciation, not rental income. Commercial / coliving / retail can hit 6–12% though. Always compute total return = yield + appreciation — a 2.5% yield + 6% appreciation is the right comparison, not the 2.5% alone.
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Use the Rent vs Buy Calculator to compare total cost of ownership against renting plus investing the difference.
How It Works
Rental yield is the annual rent a property generates expressed as a percentage of its purchase price. It is the single most important metric for evaluating real estate as a passive-income investment — distinct from capital-appreciation returns.
Gross vs net yield
Gross rental yield = annual rent ÷ property price × 100. It ignores all costs and gives the headline number a broker quotes.
Net rental yield = (annual rent − vacancy loss − maintenance − property tax) ÷ property price × 100. This is what the property actually puts in your pocket before tax — a more honest figure.
Post-tax yield adjusts for income tax on rental income at your slab. Once the 30% standard deduction under Sec 24(a) and home-loan-interest deduction under Sec 24(b) are factored in, the post-tax number is the cleanest comparison against a tax-paid FD return.
Why residential yields are typically low
Residential property in major metros runs at 2–4% gross yield — well below the ~7% currently paid by bank FDs. The investment thesis on residential is therefore capital appreciation, not rental income. Commercial, retail, and coliving / PG segments deliver materially higher yields (6–12%) and shift the thesis to cashflow. Always compute total return = yield + appreciation; that is the figure to compare against any alternative.
TDS on rent
Once monthly rent crosses ₹50,000, the tenant must deduct TDS — 10% under Section 194I if the tenant is a business / firm / trust, or 5% under Section 194IB if the tenant is an individual not in business. The owner claims this TDS back as advance tax credit when filing the ITR. The TDS rate shown here is the higher 194I figure (planning worst case).
Frequently Asked Questions
Yield expectations vary by asset class. Residential apartments in major metros typically deliver 2–4% gross / 1.5–3% net — low because residential is mainly a capital-appreciation play. Commercial office delivers 6–9% gross / 5–7% net. Retail / mall units hit 8–12%. Coliving / PG typically delivers 8–10% gross. A good yield is one that, combined with realistic appreciation, beats your alternative — usually a 7% FD post-tax.
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