Rental Property Investment: Making the Numbers Work in a Low-Yield Market
Short answer: rental property works in India when you buy for net yield and tenant depth, not for the largest unit your budget allows. Compact, well-located 2 and 3BHK configurations near employment nodes rent faster and vacate less than trophy apartments.
Net yield, prime Gurgaon
2.6–3.4%
Standard deduction on rent
30%
Vacancy to provision annually
1–2 mo
Standard lease tenure
11 mo
What the data says
Rent is set by tenant affordability near employment nodes, so proximity to corridors like Cyber City and Golf Course Extension drives occupancy.
Compact configurations have deeper tenant pools and shorter vacancy than large or unusual layouts.
Income from house property allows a 30% standard deduction plus municipal taxes, materially improving the after-tax yield.
Furnished units command 15–25% rent premiums but incur depreciation and higher churn costs.
How EstateVeda executes this
Underwrite net yield after CAM, maintenance, vacancy provision and tax — never gross.
Verify comparable rents from actual registered leases rather than listing portals.
Screen tenants on employer, tenure and deposit rather than on the highest quoted rent.
Use registered leave-and-licence agreements and maintain a documented handover inventory.
Risks we underwrite against
Extended vacancy in oversupplied micro-markets can wipe out an entire year of yield.
Tenant disputes and recovery timelines in India are slow, making tenant screening the primary control.
Society restrictions on leasing to certain tenant categories can shrink the effective pool.
EstateVeda verdict
Buy rental property for tenant depth and net yield, not for size or prestige. In Indian metros, rent is the carry that lets you hold for appreciation — treat it accordingly.
Frequently asked questions
What is a good rental yield in India?
Anything above 3% net on residential in a metro is strong. Commercial and warehousing assets reach 7–9% but carry different risk and financing profiles.
How is rental income taxed?
Under income from house property, after deducting municipal taxes and a flat 30% standard deduction, with home-loan interest deductible subject to applicable limits.
Which configuration rents fastest in Gurgaon?
Compact 2 and 3BHK units within reach of major employment corridors. They have the deepest tenant pool and the shortest average vacancy.