Rental yield and total property returns
How rental income and appreciation combine into your real total return.
“How much did my property make?” almost always gets answered with one number: how much the price went up. That leaves out the second source of return every rental property actually has: the rent collected along the way.
Two sources of return, one property
A ₹80,00,000 property appreciating at 6% a year, with a 2.5% rental yield, held for 10 years:
The price alone grows to ₹1,43,26,782: a capital gain of ₹63,26,782. Add up the rent collected over those same 10 years and it comes to ₹26,36,159. The real total return is ₹89,62,941, and rental income alone accounts for 29.4% of it, nearly a third of everything the property actually earned.
| Source | Amount over 10 years |
|---|---|
| Capital gain (price appreciation) | ₹63,26,782 |
| Cumulative rental income | ₹26,36,159 |
| Total return | ₹89,62,941 |
Why rental income gets ignored
Appreciation arrives as one headline number the day you sell or check a valuation: easy to notice, easy to talk about. Rent arrives in small monthly instalments that often get earmarked for maintenance, property tax, or simply spent, so it never accumulates into a single number in anyone’s head the way the sale price does. It’s the same money, just delivered in a way that’s easy to undercount.
Gross rental yields in India are famously low by global standards: often just 2–4%. It’s tempting to write that off as negligible, but the math above shows a modest yield still compounds into a substantial share of total return over a long enough holding period.
Project a property's future value based on historical growth rates.
How to actually measure it
When judging whether a property investment paid off, total return (appreciation plus cumulative rental income) is the honest number, not appreciation alone. If you want to isolate the yield itself, including the gross-vs-net distinction and how running costs eat into it, that’s what the Rental Yield Calculator is for; the Property Appreciation Calculator below is the one that combines both into the full picture.
All figures are indicative and for educational purposes only, not financial advice.
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