Property ROI Calculator: Net Return, Rental Yield and IRR on an Investment Flat

Return on investment sounds simple: what you got back, compared with what you put in. For a rental flat the trouble is that the money moves at different times. You pay the price, duty and interiors on day one. Rent trickles in every month, minus the months it sits empty and minus the society bill. The big cheque, the sale, arrives years later, less the broker’s cut.

This calculator tracks all of that and gives three answers. Net ROI is the total profit as a percentage of the cash you invested. Rental yield is the income side on its own, gross (rent ÷ price) and net (rent after vacancy and costs ÷ price). IRR, the internal rate of return, is the single annual rate at which your outflows and inflows balance out once timing is taken into account.

If you remember one thing, make it this: net ROI flatters long holds. A 52% gain sounds strong, but spread over seven years it is a modest annual return. IRR is the number you can hold up against a fixed deposit, a debt fund or an equity SIP.

• Purchase price: the agreement value of the flat.
• Stamp duty & registration (%): added to your day-one outlay. Most states land between 5% and 8% for a male buyer; check the stamp duty calculator for your state.
• Renovation & interiors: a one-time cost at the start. A let-ready 3BHK usually needs wardrobes, a modular kitchen, lights and fans at the very least.
• Monthly rent: what comparable flats in the same society actually rent for, not the listing price.
• Vacancy (months a year): time between tenants. One month a year is a sensible default in an established area; newer corridors with thin demand can see two or three.
• Maintenance & property tax (per year): the owner’s running costs. The model raises them 5% a year.
• Rent increase (% a year): Indian leases commonly carry about 5% annual escalation.
• Price appreciation (% a year): your assumption for how fast the flat’s value grows. This is the input that moves the answer most, so test several values.
• Holding period: years until you sell.
• Selling costs (%): brokerage and incidental costs when you exit, deducted from the sale price.

Behind the sliders, the tool builds a yearly cash-flow list. Year zero is the full outlay: price plus duty plus renovation. Each following year adds rent for the months the flat is let, minus that year’s maintenance and tax. The final year also adds the sale price after selling costs. IRR is solved from that list, so a rupee that arrives in year seven is worth less than one that arrives in year one.

Suppose you buy a ready 3BHK in Baner for ₹1.5 crore to let out. Duty and registration come to about 7%, you spend ₹5 lakh making it let-ready, and similar flats rent for ₹40,000 a month. You expect one month of vacancy a year, ₹60,000 a year in maintenance and property tax, 5% rent escalation and 6% annual price growth, and you plan to sell after seven years with 2% in selling costs. These are the calculator’s default inputs.

The flat looks like a winner on the headline: ₹86.5 lakh of profit. The IRR tells a quieter story. Six and a half per cent a year, before tax, is roughly what a good bank deposit paid in recent years, and a deposit doesn’t need tenants, repairs or a broker. The property case therefore rests on your appreciation assumption. If Baner prices grow faster than 6%, the deal improves quickly; if they stall, it doesn’t pay.

We ran the same Baner flat through the calculator, changing one input at a time. The spread shows where to spend your diligence.

Three lessons fall out of the table. First, appreciation dominates: six points of price growth swing the IRR by more than five points. Second, transaction costs are a heavy drag on short holds. Duty, interiors and the exit brokerage cost almost two points of IRR over seven years, and a three-year hold barely clears 4% because those costs are spread over so little time. Third, rent is a supporting actor in Indian residential property. Tripling your vacancy assumption, from one month to three, costs about half a point; the price you pay and the growth you get cost far more.

Use yield to screen, and IRR to decide. A flat with a 2% yield can still be a good investment if the location is on a steep growth path, but then you are buying growth, and you should be honest that the rent is a small bonus. Compare the IRR with what the same money would earn elsewhere at similar risk: a debt fund for low-risk money, an equity index fund for long-horizon money.

• A home loan. The model assumes you pay cash. Borrowing magnifies the result in both directions: a loan at 8.5% improves the return only if the flat grows faster than the loan costs you after tax.
• Income tax on rent. Rent is taxed as income from house property after a 30% standard deduction; at a 30% slab that takes roughly a fifth of the net rent.
• Capital-gains tax on the sale. Long-term gains on property are taxed at 12.5% plus cess under the rules in force for FY 2025-26. Use the capital gains calculator to estimate it.
• Brokerage when letting, repairs between tenants, furnishing replacement and insurance. Add them to the annual costs if you want a stricter figure.
• Construction delay. For an under-construction flat, rent starts only after possession; the model assumes rent from year one.
• Price risk. Appreciation is a single steady rate. Real prices move in cycles, and your exit year matters.

• Quoting net ROI as if it were annual. A 50% gain over seven years is about 6% a year, not 50%.
• Leaving out stamp duty and interiors. On a ₹1.5 crore flat they add ₹15 lakh or more to what you invest, and they are never recovered on sale.
• Using asking rents. Listings overstate; closed deals in the same society are the real number.
• Assuming no vacancy. Even in strong areas, the gap between tenants plus the letting broker’s fee usually costs one to two months’ rent a year.
• Anchoring on past growth. A corridor that doubled in five years has already priced in much of its story. Test the deal at half the growth you expect.
• Ignoring tax. A 6.6% pre-tax IRR can fall toward 5% after tax on rent and gains, depending on your slab.

When a client asks whether a flat is a good investment, we run it three times: at a cautious growth rate, at the growth the corridor has delivered recently, and at the developer’s pitch. If the cautious case still beats a debt fund after tax, the deal has a margin of safety. If it only works at the optimistic rate, the buyer is taking a growth bet and should size it accordingly.

Pair this calculator with our project research pages, which show each project’s asking price per square foot, its locality’s price history and our rental-yield estimate, and with the price tracker to see how the locality has moved over one, three and five years.