How to use this rental property calculator
- Purchase price and Down payment (own contribution): the loan is the difference. Enter the full price for a cash purchase.
- Interest rate and Loan tenure: your home loan terms. Indian loans are repaid in monthly EMIs on a reducing balance.
- Monthly rent: the full rent a tenant would pay.
- Open "More options" for the costs: Stamp duty, registration & fees, Vacancy, Management fee (0 if you manage it yourself), Repairs & upkeep, Property tax (municipal), Property insurance, Society maintenance and Other costs.
- Set Rent growth, Appreciation, the Holding period and Selling costs to project the long-run return.
The result shows your monthly cash flow in year one, then net operating income, gross and net yield, the cash you invest, your equity at the end and the annualised return. A chart and a year-by-year table follow the rent, EMIs and equity over the holding period.
The formulas behind rental returns
Rent collected = monthly rent × 12 × (1 − vacancy)Net operating income (NOI) = rent collected − running costsCash flow = NOI − EMIsGross yield = annual rent ÷ price · Net yield = NOI ÷ (price + stamp duty & fees) The results also show two terms from US property investing. Cap rate is NOI ÷ purchase price, a net yield before EMIs. DSCR is NOI ÷ EMIs: below 1, the rent does not cover the loan. The annualised return (IRR) puts everything together, your cash in, each year’s cash flow, and the sale proceeds after selling costs and clearing the loan, as one yearly rate.
Worked example
You buy a ₹75 lakh flat with ₹15 lakh down and a ₹60 lakh loan at 8.5% over 20 years, and let it for ₹20,000 a month.
- Rent is ₹2,40,000 a year. With 5% vacancy, about 0.6 months empty, you collect ₹2,28,000.
- Running costs: society maintenance ₹36,000 (₹3,000 a month), repairs ₹37,500 (0.5% of the value), property tax ₹10,000 and insurance ₹3,000, a total of ₹86,500.
- That leaves NOI of ₹1,41,500 a year, or ₹11,792 a month.
- EMIs on the loan come to ₹6,24,833 a year, so cash flow is −₹4,83,333: −₹40,278 a month that you top up.
You put in ₹20,25,000: the down payment plus ₹5,25,000 of stamp duty, registration and fees. After 10 years at 5% growth the flat is worth ₹1,22,16,710 with ₹41,99,629 of loan left, so your equity is ₹80,17,080. After 2% selling costs and all the top-ups, your total profit is ₹12,79,191, an annualised return of 2.8%. To break even in year one, the rent would need to be ₹62,398 a month.
How much you borrow changes the return
The same flat and rent, held for 10 years at 5% growth, with different down payments:
| Down payment | Cash invested | Cash flow a month (year one) | Annualised return | Total profit |
|---|---|---|---|---|
| ₹15,00,000 | ₹20,25,000 | −₹40,278 | 2.8% | ₹12,79,191 |
| ₹30,00,000 | ₹35,25,000 | −₹27,260 | 4.1% | ₹23,91,180 |
| ₹45,00,000 | ₹50,25,000 | −₹14,243 | 4.9% | ₹35,03,169 |
| ₹75,00,000 (no loan) | ₹80,25,000 | ₹11,792 | 5.9% | ₹57,27,147 |
Borrowing magnifies a return only when the property earns more than the loan costs. Here the loan costs 8.5%, while the flat earns about 5.9% a year from rent and growth combined (the cash-purchase return), so each extra rupee borrowed drags the return down. A larger down payment improves the percentage, though it ties up more of your money that could have earned something elsewhere.
Growth does the heavy lifting
With yields this low, the result rests on the property’s value. With the same ₹15 lakh down, appreciation of 3% a year instead of 5% turns the 10-year result into a loss of ₹7,73,624, an annualised return of −2%. At 7% a year the profit rises to ₹37,18,932, a return of 7%. Hold for 20 years at 5% and the loan is fully repaid; the annualised return is 5.2%, with a total profit of ₹96,58,916. Try a few growth rates before you commit.
Indian costs and rules to include
Instead of HOA or strata fees there is society maintenance, a monthly charge, and the yearly local charge is property tax to the municipality. The large one-off cost is stamp duty and registration, which each state sets: typically about 5–7% of the property value plus about 1% for registration. The ₹5,25,000 default is 7% of ₹75 lakh, so adjust it for your state and add the loan processing fee and legal charges. There is no PMI, and because Indian loans are repaid in monthly EMIs on a reducing balance, the calculator does not offer an interest-only option.
Banks commonly lend up to 90% of the value for home loans up to ₹30 lakh, 80% for ₹30–75 lakh and 75% above ₹75 lakh, which sets the smallest down payment you can plan around; check yours with the home loan LTV calculator. If you are deciding whether to buy a home to live in rather than let, the rent vs buy calculator is the better tool, and the home loan EMI calculator shows the EMI schedule in detail.
Frequently asked questions
Is buying a flat to rent out a good investment in India?
How is cash flow from a rental property calculated?
What is a good rental yield in India?
What does cap rate mean?
Does a bigger down payment improve the return?
Does the calculator include income tax on rent?
Sources and further reading
Independent, official guidance on this topic. Rules differ by country, so check the regulator where you live.
- Reserve Bank of India: regulations, notifications and consumer awareness · Reserve Bank of India
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.