"Rent will pay the EMI" is the most repeated — and most wrong — line in Indian property conversations. On most residential flats, rent covers only a fraction of the EMI, because net rental yields in India typically sit at just 2–4%.
Gross yield vs net yield
Gross yield is annual rent ÷ total property cost. Net yield subtracts what ownership really costs: society maintenance, property tax, repairs, brokerage and vacancy months between tenants. A flat with a 3.6% gross yield often nets barely 2.5% — and that gap is where investment decisions go wrong.
The free Rental ROI Calculator runs this honestly: purchase price plus registration and interiors, expected rent, vacancy months, maintenance and tax — giving you gross yield, net yield, total ROI including appreciation, and the payback period from rent alone.
What's a realistic number?
- Residential: 2–4% net is typical; 3%+ is decent. Bengaluru and Hyderabad often out-yield Mumbai and Delhi.
- Commercial (shops, offices): 6–9% is common, with different risk and lock-in dynamics.
- Compare against alternatives: if an FD pays ~7%, a 2.5% yield property is really a bet on price appreciation, not income.
Don't forget the recurring costs
Society maintenance alone can eat 15–20% of rent. If you're on a society committee, our Society Maintenance Split Calculator divides monthly expenses per flat — equally or by square foot. And if you're the tenant's side of this equation, the Rent Receipt Generator handles HRA proof in a minute.
Property can absolutely be a good investment — but only after the yield math, not instead of it.