Rental yield is the most misunderstood metric in Indian real estate investment. Builders advertise projected yields of 5-7%. The actual yields — after vacancy, maintenance, and property management — are significantly lower. Here is the real data for Gurugram and Bengaluru, India's two strongest rental markets.
Gross yield = Annual rent ÷ Property value × 100. This is what developers advertise.
Net yield = (Annual rent − vacancy − maintenance − property tax − management fees) ÷ Property value × 100. This is what you actually earn.
In India, the gap between gross and net yield is typically 1-1.5 percentage points. A property advertised at 4% gross yield delivers approximately 2.5-3% net yield in reality.
Gurugram's rental market is driven by MNC employees, expat tenants, and senior professionals. 2BHK units in Sector 48-65 command ₹35,000-65,000/month. Vacancy periods average 4-6 weeks between tenants. The highest yields come from furnished units near business districts.
Bengaluru consistently delivers India's strongest residential rental yields among major cities. The reason is simple: tech employment density creates consistent, well-paying tenant demand. Electronic City and Sarjapur Road are the standout performers — lower property values relative to rent means higher yields.
With savings account rates at 3-4% and FD rates at 6.5-7%, a rental yield of 3-4% alone does not justify a residential property investment. The real investment case requires combining rental yield with capital appreciation expectation over 7-10 years.
If you expect 8-10% annual appreciation plus 3-4% rental yield, the total return of 11-14% makes a compelling case. But that appreciation assumption needs to be verified against the specific project, builder, and micro-market — not assumed.
Before investing in any rental property — verify the builder, check the RERA status, and confirm the price against zone benchmarks. DecodeDeal gives you the complete risk picture in 60 seconds.
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