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Rental yield calculator

Gross yield, net yield, cap rate and cash on cash in one pass.

The property

Rs

Rs 2.5 crore

Rsa month
92% let

Lost rent at this level is Rs 105,600 a year.

Running costs

8.0% of rent
5.0% of rent

Set to zero if you manage it yourself.

0.20% of value
0.15% of value
2.0% of rent
Rs
Net yield3.66%

Below average for this market. Gross yield is 5.28% before costs, and net operating income is Rs 914,740 a year.

  • Gross5.28%
  • Cap rate3.66%
  • Cash on cash3.45%
3.7%Net yieldMarket runs 3.5% to 6.5%
  • Monthly cash flowRs 76,228The property pays for itself
  • Net operating incomeRs 914,740From Rs 1,214,400 of collected rent
  • Costs eat24.7%Of the rent you actually collect
  • Break even occupancy10.5%Below this the property loses money

Where the rent goes

Rent collectedRs 12.14 lakh
  • Property taxRs 50k4.1%
  • InsuranceRs 37.5k3.1%
  • MaintenanceRs 97.15k8.0%
  • Letting and managementRs 60.72k5.0%
  • Utilities and service chargeRs 24.29k2.0%
  • Other running costsRs 30k2.5%
  • Left overRs 9.15 lakh75.3%

Rent needed for a target yield

Target net yieldMonthly rent neededChange required
4%Rs 119,086+Rs 9,086
5%Rs 145,727+Rs 35,727
6%Rs 172,368+Rs 62,368
7%Rs 199,009+Rs 89,009
8%Rs 225,650+Rs 115,650
9%Rs 252,291+Rs 142,291
10%Rs 278,932+Rs 168,932

Yield and cash flow over time

0.0%1.6%3.2%4.8%6.4%1357910
  • Net yield on current value
  • Gross yield
  • Cash on cash
Years held

Year by year

YearRentCostsNet incomeCash flowEquity
Year 1Rs 1,320,000Rs 299,660Rs 914,740Rs 914,740Rs 27,000,000
Year 2Rs 1,412,400Rs 319,461Rs 979,947Rs 979,947Rs 29,160,000
Year 3Rs 1,511,268Rs 340,578Rs 1,049,789Rs 1,049,789Rs 31,492,800
Year 4Rs 1,617,057Rs 363,098Rs 1,124,594Rs 1,124,594Rs 34,012,224
Year 5Rs 1,730,251Rs 387,116Rs 1,204,715Rs 1,204,715Rs 36,733,202
Year 6Rs 1,851,368Rs 412,730Rs 1,290,528Rs 1,290,528Rs 39,671,858
Year 7Rs 1,980,964Rs 440,049Rs 1,382,438Rs 1,382,438Rs 42,845,607
Year 8Rs 2,119,632Rs 469,186Rs 1,480,875Rs 1,480,875Rs 46,273,255
Year 9Rs 2,268,006Rs 500,262Rs 1,586,303Rs 1,586,303Rs 49,975,116
Year 10Rs 2,426,766Rs 533,408Rs 1,699,217Rs 1,699,217Rs 53,973,125
Reading the numbers
Gross yield ignores every cost, so it flatters. Net yield and cap rate are the same figure here: net operating income over the purchase price, before finance. Cash on cash is the one that tells you what your own money earned, and it is the only one affected by how much you borrowed.
Net yield3.66%Rs 76,228 a month

About this calculator

Price a rental against the market, see which expenses erode the return, and find the rent you would need to hit a target yield.

Benchmarks are broad market averages. A single street can sit well outside them.

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Rental yield calculator | Jagaan