Work out your real yield and cash flow, after vacancy, expenses, and financing — not just rent ÷ price.
The Property
The Rent
Operating Expenses
Projection
Cumulative net cash flow
Year 1 annual expense breakdown
Gross yield is annual rent ÷ price. Net yield (cap rate) is net operating income (rent after vacancy and operating expenses, before loan payments) ÷ price. Cash-on-cash return is annual cash flow after the loan EMI ÷ total cash actually put in (down payment + closing costs, or full price + closing costs if unfinanced). Break-even occupancy is the minimum rent collection rate needed to cover expenses and EMI. This is an illustrative estimate, not financial or tax advice.
A quick "rent ÷ price" calculation ignores vacancy, operating expenses, and financing — three things that can turn a property that looks like a 4% yield on paper into a much thinner (or negative) real cash flow once you account for them. This calculator works the way a serious rental investor would: starting from gross rent, subtracting vacancy and operating costs to reach Net Operating Income (NOI), then subtracting loan payments to reach actual cash flow.
In Indore, rental yields vary meaningfully by locality and property type — compact 1-2BHK units near IT hubs and colleges often show higher gross yields than larger family homes in premium localities, but may also carry higher vacancy and management overhead. Running your specific numbers through this calculator, rather than relying on a citywide average, gives a far more reliable picture.
Effective Gross Income = (Monthly Rent × 12) × (1 − Vacancy %)NOI = Effective Gross Income − Operating ExpensesGross Rental Yield = (Monthly Rent × 12) ÷ Purchase PriceNet Yield (Cap Rate) = NOI ÷ Purchase PriceNet Cash Flow = NOI − Annual Debt Service (if financed)Cash-on-Cash Return = Net Cash Flow (Year 1) ÷ Total Cash Invested
Operating expenses include property tax and insurance (fixed, inflating annually), maintenance and management fees (a percentage of rental income, so they scale with rent), and society/HOA charges. Break-even occupancy is the minimum share of rent you'd need to actually collect to cover fixed expenses and debt service without going cash-flow negative.
Even a modest 5–8% vacancy allowance meaningfully reduces effective income — screening reliable tenants and pricing rent competitively both help minimise real-world vacancy.
A smaller down payment increases cash-on-cash return when net yield exceeds your loan rate (positive leverage), but also increases the risk of negative cash flow if rent falls or vacancy rises.
Self-managing versus hiring a property manager (typically 6–10% of rent) is a direct trade-off between your time and your net yield — factor in realistically which you'll actually do long-term.
Gross rental yields for residential property in Indore commonly range from about 2.5% to 4%, with compact units near employment hubs sometimes trending higher. Net yield, after expenses and vacancy, is typically 1–2 percentage points lower.
Gross yield ignores vacancy, maintenance, management fees, property tax, and insurance. Net yield (cap rate) subtracts all of these to arrive at NOI, giving a much more realistic picture of actual return.
It's the minimum percentage of the year's potential rent you need to actually collect (accounting for vacancy) to cover all expenses and loan payments without going cash-flow negative. Lower is safer.
It depends on whether your net yield exceeds your loan interest rate. If it does, financing amplifies your cash-on-cash return (positive leverage); if not, it can turn a profitable property into a cash-flow-negative one.
It's a trade-off — property managers typically charge 6–10% of rental income but reduce your time commitment and often reduce vacancy through faster re-leasing. Model both scenarios using the management fee field.
No. This tool provides an illustrative estimate based on the assumptions you enter. Speak with a floor.estate advisor for guidance specific to your property and locality.
Our advisors can validate your rent, vacancy, and expense assumptions against real listings in the locality you're considering.