For property investors: calculate the rental yield on a property and the total return combining rental income with price appreciation over your holding period.
Gross rental yield is your annual rent divided by the property's purchase price, expressed as a percentage. Net yield subtracts annual maintenance and property tax before dividing, giving a more realistic income return. Total ROI combines this income return with the property's estimated price appreciation over your holding period — since in India, appreciation often contributes more to total real estate returns than rental income alone.
Residential rental yields in most Indian cities typically range from 2-4% annually, which is considerably lower than in many other countries — most of the return in Indian real estate historically comes from price appreciation rather than rental income.
Rental yield only captures income return — it ignores property price appreciation (or depreciation), which is often the larger component of real estate returns in India. Total ROI should combine both rental income and capital appreciation for a complete picture.