Property Yield Explained: What It Is and How It Affects Your Investment

When you buy a property to rent out, property yield, the annual return you earn from rent compared to the property’s purchase price. Also known as rental yield, it’s not about how much the property might sell for later—it’s about the cash you get right now, every month. Many people focus on price, location, or square footage, but if your yield is low, you’re not making money—you’re just holding onto an expensive asset.

Property yield is calculated simply: divide your yearly rent by the property’s purchase price, then multiply by 100. If you bought a flat for ₹80 lakh and rent it out for ₹40,000 a month, your annual rent is ₹4.8 lakh. That gives you a yield of 6%. That’s solid in Mulund. But if you paid ₹1.2 crore for the same flat, your yield drops to 4%—and suddenly, it’s not such a smart buy. Location matters, but yield tells you if the numbers actually work. rental income, the money you collect from tenants each month is the engine behind this. Without steady rent, yield doesn’t exist. And cash flow property, what’s left after paying mortgages, taxes, and maintenance is what puts money in your pocket. A high yield with poor cash flow? That’s a trap. A moderate yield with strong cash flow? That’s the sweet spot.

What drives yield up or down? Interest rates, tenant demand, and property condition. In Mulund, demand for rentals stays high because of the metro connectivity, schools, and growing job hubs. That keeps vacancy low and rent stable. But if your property needs ₹2 lakh in repairs, your yield drops before you even get a tenant. Taxes, insurance, and property management fees eat into returns too. Most people forget these until they’re paying them. The best investors don’t just look at the sticker price—they calculate the full cost of ownership and compare it to what the market will actually pay.

You’ll find posts here that break down real examples: how long it takes to break even on a rental, what a good cash-on-cash return looks like, and why some properties that seem expensive actually deliver better returns. Some posts talk about commercial property yields—those can be higher, but come with different risks. Others show how taxes and loan terms change your real profit. There’s no magic number for yield—it depends on your goal. Are you building long-term wealth? Or do you need monthly income? The right yield for one person might be terrible for another. What matters is knowing your numbers before you sign anything.