Rental yields in South Delhi: what to expect
South Delhi rents are high in absolute terms but yields are modest. Here's how to calculate gross and net yield.
Rental yield is the annual rent as a percentage of the property's value.
Gross yield
Annual rent ÷ property value × 100. For example, a ₹6 Cr floor renting at ₹1.5 lakh a month earns ₹18 lakh a year — a gross yield of 3%.
Net yield
Subtract annual costs from rent first:
- Maintenance and repairs
- Property tax
- Vacancy (a month or two between tenants)
- Brokerage on new leases
Net yields in prime South Delhi are typically lower than gross yields by half a percentage point or more.
Why buy for rent then?
Investors in South Delhi usually combine modest yields with long-term value appreciation and the security of land ownership in a supply-limited market.
Calculate yours
Try our rental yield calculator.
Typical gross yields
Prime South Delhi homes typically yield around 2–3% gross. Smaller floors in value colonies can yield a little more, while large Category A floors often yield less, even when leased to embassies.
Ways to improve yield
- Furnish well: furnished homes rent faster and command higher rents
- Target corporate tenants: longer leases mean less vacancy
- Keep the property maintained: small repairs prevent long vacancies
- Price realistically: a month of vacancy costs more than a slightly lower rent
Total return
Total return = rental yield + capital appreciation. Investors in South Delhi usually rely on both.
Tax on rental income
Rental income is taxed after a 30% standard deduction on the annual value, plus home-loan interest for let-out property. See home loan tax benefits.
Frequently asked questions
Which colonies have the best yields? Value colonies such as C.R. Park, Green Park Extension and Saket often show higher yields than Category A colonies.
