How to Calculate ROI on Real Estate Investment in India
Learn to evaluate real estate returns like a pro — rental yield, capital appreciation, and total ROI calculation.
Understanding Real Estate ROI
Real estate ROI in India comes from two sources: rental yield and capital appreciation. Here's how to calculate both and make informed investment decisions.
Rental Yield
Annual Rental Yield = (Annual Rent / Purchase Price) × 100. In Indian metros, residential rental yields range from 2-4%, while commercial properties can yield 6-10%.
Capital Appreciation
Track the historical price growth of the area over 3-5 years. Emerging corridors in Rajasthan have shown 15-25% annual appreciation.
Total ROI Formula
Total ROI = [(Current Value - Purchase Price + Total Rent Received) / Purchase Price] × 100. Always account for registration costs, stamp duty, and maintenance expenses.
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