🏘️Rental Property Calculator

Rental Yields in the Indian Market

Residential rental yields in India are traditionally low, hovering between 2% and 3% in cities like Mumbai and Delhi. However, commercial properties can offer 8-10%. The RBI housing reports highlight these trends. Use this tool to compare the yield of an apartment in Noida versus a shop in Mumbai, helping you decide where to deploy your capital for the best monthly cash flow in INR.

Reserve Bank of India (RBI) – Housing Data

Maximizing the 30% Standard Deduction

Under Section 24 of the Income Tax Act, the Indian government allows a flat 30% deduction from your 'Net Annual Value' for repairs and maintenance, regardless of your actual spending. This is a significant tax break for Indian landlords. Our calculator applies this deduction automatically, showing you your taxable rental income after accounting for this benefit.

Income Tax Department of India

Society Maintenance and Municipal Taxes

In India, 'Society Maintenance' charges can be high and are usually paid by the tenant or adjusted in the rent. Additionally, Municipal Property Tax varies by city. The Ministry of Housing notes that these costs must be subtracted to find the 'Net Annual Value' of the property. Our calculator helps you track these outflows to ensure your 'income from house property' reporting is accurate.

Ministry of Housing and Urban Affairs

How is 'Income from House Property' taxed in India?

Gross Rent - Property Tax = Net Annual Value (NAV). Then, 30% of NAV is deducted for repairs, and any home loan interest is subtracted. The remaining amount is added to your total income and taxed at your slab rate. This tool provides a clear breakdown of this Indian tax calculation, helping you optimize your returns from rental units.

Should I invest in a 'Ready-to-move' or 'Under-construction' property?

Ready-to-move properties provide immediate rental income, while under-construction properties may offer higher capital appreciation. However, the RERA Act in India ensures better protection for delayed projects. Use our tool to simulate the 'lost rent' during construction versus the potential lower purchase price to see which offers a better IRR.

What is the typical security deposit in India?

Security deposits vary by city: in Bengaluru, it's often 10 months' rent, while in Mumbai or Delhi, it's 2-3 months. While this is not 'income,' it provides a zero-interest capital float for the landlord. Our calculator allows you to factor in this initial cash inflow to see your 'Net Investment' and how it improves your overall ROI.

Cap Rate

Cap Rate (Capitalization Rate) is annual NOI divided by purchase price. Shows return if you paid cash. Good: 6%+, Excellent: 8%+.

Cash-on-Cash Return

Annual cash flow return on your cash investment (down payment + closing costs). Accounts for leverage. Good: 8%+, Excellent: 12%+.

1% Rule

A quick rule: monthly rent should be at least 1% of purchase price. If a property costs $300,000, it should rent for $3,000+/month.

DSCR

Debt Service Coverage Ratio shows how much NOI covers mortgage payments. Below 1.0 means negative cash flow. Lenders typically require 1.25+.

NOI

Net Operating Income is income after all operating expenses, but BEFORE mortgage payments. It's the standard metric for valuing commercial properties.