Calculate Rental Yield: How to Measure Property Returns in India

When you calculate rental yield, you’re not just counting rent—you’re figuring out if your property is actually making money. rental yield, the percentage return you earn from renting out a property compared to its purchase price. It’s the simplest way to compare one property to another, whether it’s a flat in Prayagraj or a house in Lucknow. Many investors skip this step and end up owning a home that eats money instead of generating it. The formula is easy: annual rent divided by property value, times 100. But what most people miss is that the real number only shows up after you subtract taxes, maintenance, and vacancy losses.

rental income India, the money you get from tenants, is taxed under "income from house property". property investment, especially in cities like Prayagraj, isn’t just about buying low and renting high. It’s about understanding local demand, tenant profiles, and how municipal rules affect your cash flow. A 10% gross yield might look great until you realize your property sits empty two months a year, or your repairs cost ₹15,000 every quarter. The rental yield formula, when adjusted for real expenses, tells you the truth. And if you’re thinking of buying a second home to rent out, don’t forget that the real estate returns, especially in tier-2 cities, often beat stock market returns over time. But only if you’re careful about where you invest.

Prayagraj’s growth as a city—thanks to infrastructure upgrades, better connectivity, and rising demand from students and professionals—means rental demand is steady. But not all areas are equal. A property near the university or the new metro line will outperform one in a quiet suburb with no public transport. The same goes for property type: a 2BHK in a gated community might rent for more, but your maintenance and security costs will be higher. When you calculate rental yield, you’re not just doing math—you’re making a decision about where your money works hardest.

Below, you’ll find real examples from investors who’ve cracked the code in Uttar Pradesh. Some switched from equity funds to rental properties after learning how tax rules impact returns. Others discovered that a ₹40 lakh apartment in Prayagraj could generate ₹25,000 a month in rent—after deductions. These aren’t stories of luck. They’re stories of people who learned how to measure value properly before they bought.