1. Gross rental yield compares annual rent with property value
If a ₹1 crore property earns ₹25,000 monthly rent, annual rent is ₹3 lakh and gross yield is about 3%.
Tip: Illustration only; actual property costs differ.
2. Net rental yield subtracts real ownership costs
Maintenance, property tax, repairs, brokerage, vacancy and society charges can reduce the income actually retained.
Tip: Net yield is more useful than gross yield.
3. Appreciation is separate from rental yield
A low-yield property can still appreciate, and a high-yield property can stagnate in price. Do not combine assumptions casually.
Tip: Income return and price return are different.
4. Financing changes investor cash return
If the property is leveraged, EMI and interest affect cash flow. Loan principal repayment builds equity but is not an operating expense in the same way as interest.
Tip: Separate property economics from financing economics.
5. Quick check
A ₹1 crore property earns ₹3 lakh annual rent before costs. Gross yield?
Answer: B - ₹3 lakh divided by ₹1 crore equals 3%.