How Much Is The Average Rental Income in Top Indian Metropolitan Cities

There are numerous opportunities for real estate investment in 2021. Property prices in major cities that had remained unchanged have begun to show some positive shifts.

Share on facebook
Share on twitter
Share on linkedin
How Much Is The Average Rental Income in Top Indian Metropolitan Cities

Rentals are one of the best ways to generate passive income, but the understanding rental yield is the best way to ensure that you get the most out of your real estate investment. Real estate investors in India are looking for capital appreciation rather than rental income. Rents have not risen in proportion to housing prices, resulting in a low rental yield.

Rental Yield is defined as the ratio of the property’s annual rent to its total cost. In general, a 3–5% gross rental yield for apartments is considered an average expectation in India and is common in most cities. Individual homes typically have a higher rental yield. Commercial properties typically have a rental yield of 6–10%. Along with these two rental yield classifications, a new segment has emerged from co-working spaces, student housing, and warehousing.

To get a higher rental yield, you must first decide whether to invest in a commercial or residential property. Check the vacancy rates in the area depending on the location. Some key points to keep in mind if you want to increase your rental yields are:

  • Invest in a low-cost home to increase your rental yield.
  • Invest in co-living arrangements.
  • Invest in niche markets.

Read Also: Top Features Of A Profitable Rental Property – Do They Make Reliable Assets For Retirement?

Different metropolitan Cities and their Rental Yield 

  • Hyderabad

Hyderabad is one of the most cost-effective cities in which to invest in real estate. The two most important factors for real estate investment in Hyderabad are the low cost of living and the excellent infrastructure making it one of the main destinations for rental investment. NH-163, NH-765, NH-44, NH-65, The South and Central Railway Zones, as well as Rajiv Gandhi International Airport, provide excellent transportation options.

Because of this strong track record, 9,349 new products were launched in the first quarter of 2021, resulting in an 80 percent increase in sales. This demonstrates Hyderabad’s popularity for real estate investment in India.

Also Read: Investing in Hyderabad Real Estate-A Boon or Bane?

  • Mumbai

Mumbai’s dream city offers rental properties in all price ranges, with over 62,270 units listed for rent. The majority of available units are two-bedroom, but one-room kitchen (1RK) accommodations are also popular, especially among those looking to live on a budget. Inexpensive locations: 2BHKs are affordable in Thane, Palghar, Mira Road East, Dombivali East, Virar, and Panvel. These are priced between Rs 15,000 and Rs 15,000 per month, depending on the unit size, exact location, amenities, and so on.

Spacious 2BHK properties are available in Malad East, Ghansoli, Juhu, Agripada, Bandra West, and other areas which cost up to Rs 4 lakh per month. Three-bedroom and larger configurations can command monthly rents of up to Rs 15 lakhs. Chembur, Prabhadevi, Carter Road, Tardeo, and Napean Sea Road are among the top localities with rental properties currently listed, according to Assetmonk data.

  • Delhi

In Delhi, there are currently over 27,000 rental units available. 3BHK units are comparatively more popular than smaller units in Delhi, as their price ranges between Rs 5,000/- per month to Rs 11 lakhs. Paschim Vihar, Jangpura, parts of Dwarka, Nizamuddin, and Kundli are some areas where you can find properties for rent at affordable rents of up to Rs 20,000 per month. 

Luxury locations: Some of the high-end properties can be found in Delhi’s hotspots such as Chanakyapuri, Greater Kailash, Vasant Vihar, Hauz Khas, Punjabi Bagh, Jor Bagh, and others. Rents can reach Rs 25 lakh per month, but these are large properties, mostly independent houses, villas, and opulent apartments. 

  • Bengaluru

The garden city has nearly 15,000 available rental units. One-bedroom and two-bedroom apartments are equally popular. Affordability: Rajarajeshwari Nagar, Doddaballapur, LHR Layout, MS Palya Road, and other nearby areas offer affordable rental units. You could find reasonably priced 2BHK units starting at Rs 6,000 per month. 

Luxury locations: Given that 2BHKs are the most quickly sold in any market, some of the most expensive properties can be found in Frazer Town, ISRO Layout, Indira Nagar, Marathahalli, and other areas. A 2BHK unit can cost up to Rs 5 lakh per month in rent.

Read Also: Ultimate Guide for Bangalore Real Estate Investment

  • Chennai

The Tamil Nadu capital is primarily an end-user-driven market, making it less susceptible to speculation. North Chennai is primarily industrial, whereas central Chennai is the city’s most developed area, with well-established commercial and residential markets. South and West Chennai, which were previously primarily residential areas, are quickly becoming commercial zones, with many IT and financial services companies located there.

Nodes like Perungudi, Sholinganallur, and Siruseri, as well as GST Road, have created a plethora of job opportunities in south Chennai. The state government’s focus on providing excellent road connectivity along these nodes has aided in the development of this region.

Read Also: Real estate investment opportunities in Chennai 2021

  • Kochi

Kochi is not only on the government’s list of smart cities, but it is also on the radar of many new IT companies. Aside from being Kerala’s commercial center, recent developments like the privatization of the international airport and the upgrading of the seaport have improved the city’s real estate prospects.

NRIs have traditionally driven residential real estate in Kochi. Only 30% of end-users are locals. Despite a drop in NRI investments over the last two years, housing demand remains strong.

The city has seen significant infrastructure development. A metro corridor, the operation of mobility hubs, the expansion of IT parks, and the development of the Amballur village’s Electronic Park are all on the agenda.

With a budget of Rs 50 lakh, you can buy a home in Kakkanad, Thripunithura, Maradu, or Aluva. Properties in Edapally, Kaloor, and Vytilla can be purchased for less than Rs 75 lakh. Property in Marine Drive, Panampally Nagar, and Kadavanthra can cost more than Rs 1 crore.

  • Pune

The city’s proximity to Mumbai, as well as a thriving education, engineering, automobile, and information technology scene, have accelerated real estate activity in this once sleepy city. The Mumbai-Pune Expressway has made Pune a popular destination for out-of-town investors, while the year-round pleasant weather makes it a popular choice for homebuyers.

In the last five years, the Pune real estate market has gone from being average to one of the best. Pune has a wide range of properties to suit both end-users and investors. In the affordable segment, prices range from Rs 15 to Rs 30 lakh.

Premium projects start at Rs 1.3 crore, while luxury projects can cost up to Rs 2.5 crore. The upcoming areas to scout in Pune are Vishrantwadi, Dhanori, Kharadi, and Whagoli in the east, and Wakad, Hinjewadi, Ravet, and Tathawade in the west.

Best cities for commercial rental yield

According to a report by global property consultancy, Bengaluru, Mumbai, and Delhi have the highest rental yield for office space among the world’s 20 leading business cities. According to the Global Cities-2016 report, Bengaluru has a rental yield of 10.5 percent, while Mumbai and Delhi have rental yields of 10% and 9%, respectively.

The rental yield is simply the annual rental income you earn expressed as a percentage of the property purchase price. According to the report, the annual rental income earned from office properties in these three cities is the highest among leading business centers, as a percentage of the property price.

These three cities are far ahead of other global cities with rental yields of 4%, such as London and New York. Office properties are a good investment because of their high rental yield. According to the reports, the robust growth in rental yields in India is being attributed to expanding e-commerce firms and start-ups, which are driving up demand for office space in the country.

IT and IT-enabled services (ITes) sectors, banking and financial services, and manufacturing firms have all contributed to the strong demand. Rental prices in these cities are expected to rise by 22 and 16 percent, respectively.

All of the best cities to invest in India listed above are ideal if you want to start or increase your rental income. If you are looking to buy or rent a property in one of the top cities mentioned above, Assetmonk has thousands of properties that are perfectly suited to your needs. Assetmonk is a WealthTech Platform that provides rental investment with an IRR of 14-21 percent in cities such as Bangalore, Chennai, and Hyderabad.

The Average Rental Income in Top Indian Metropolitan Cities FAQ'S:

Rental properties are an excellent source of cash flow. Another advantage of being a landlord is that positive cash flow can lead to a high return on investment (ROI) for rental properties. Capability to generate passive income. Having a rental property is one way to generate passive income – income that you do not have to work for.

According to data from a leading real estate platform, Mumbai has the most rental property supply in the country, followed by Delhi, Bengaluru, Gurugram, and Pune.

We have observed that properties priced below Rs 6,000/sqft have an average rental yield of more than 3% across cities. Property priced at Rs 6,000 per sq ft or more, on the other hand, had rental yields ranging from 2.4 percent to 3 percent.

Related Articles

istockphoto 155700839 612x612 1

Rental housing demand will increase in crucial micro markets

The real estate market has exploded in the post-pandemic era. The corporate market is increasing, increasing demand for commercial space and rental residences. According to industry statistics, in the second quarter of this year, Indian rental home searches climbed 84.4% year on year and 29.4% sequentially. Furthermore, total combined rental housing listings rose 3% quarter on quarter and 28.1% year on year throughout the 13 Indian cities covered. Do not miss The 18% GST on rent gets anticipated to harm the rental housing industry. But, what are the variables that will lead to the rental housing demand boom? Accessibility and cost-effectiveness: When it comes to renting a property, people primarily examine three factors: infrastructure, connection, and price. The property’s location, with ready infrastructure and decent connection, takes precedence over the size and price of the unit. Customers want a home in a prominent location that allows them to maintain a good work-life balance, with less commuting time, easier access to…

Read more
istockphoto 1393356971 612x612 1

REITs, New Age Instrument: Investing in Properties Without Actually Investing in One

Real estate investing always meant purchasing, owning, and managing an actual property. But, did you know that it can still be done without actually owning the property? Thanks to REITs, investors need only put their money into corporations that possess substantial portfolios of self-appreciating real estate assets in some of the world’s most desired locales. Welcome to the world of REITs where you can buy real estate without the inconvenience of owning the property altogether. Easy peasy lemon squeezy right? Real estate investment trusts are popular among investors who wish to buy real estate without the inconvenience of owning the property altogether. These investments, known as REITs, allow investors to deposit money into income-producing real estate. A REIT is best described as a simple way to own real estate without actually purchasing any property. Investors can acquire individual shares of a real estate investment trust, similar to stocks, which gives them little chunks of several properties. This protects them from…

Read more
istockphoto 1394977436 612x612 1

Commercial Real Estate Leases: Different Types and Which Is the Best?

Leasing commercial space is a significant financial commitment and requires commercial real estate leases. These leases can be intimidating, especially because they are a huge commitment that can be costly. However, they are not as difficult as many people believe. A commercial real estate lease, like most other legal transactions, should not be taken lightly. As a result, when renting commercial space for the first time, it is critical not only to thoroughly study the industry but also to have a good understanding of the many forms of commercial leases accessible in India. Also, read Commercial Real Estate Is Booming In 2022: Explore How You Can Also Profit Via This Alternative Investment. Here’s an explanation of the many forms of commercial real estate leases and what they imply for renters and landlords: Firstly, what are commercial real estate leases? Commercial leases, as opposed to residential leases, are an arrangement between a renter (company) and landlord that specifies the property only…

Read more
istockphoto 817688664 612x612 1

The Indian real estate market would be worth $1 billion by 2030: RBSA Advisors

According to RBSA Advisors, the real estate business gets expected to grow by 15% by 2030, reaching $1,000 billion. According to RBSA Advisors, the Indian real estate sector would grow at a 15% CAGR from $60 billion in 2010 to $1,000 billion by 2030, contributing 13% of the country’s GDP by 2025. The organized retail real estate industry get expected to rise by 28% to 82 million square feet by 2023. Per “The Outlook of the Real Estate Sector in India,” the Indian real estate sector is showing strong indications of recovery as the economy recovers from the pandemic. Also, read JLL reports Indian real estate garnered $943 million in investments worth in Q1 2022. Despite a little increase in prices and a slight increase in home loan interest rates, the real estate industry has thrived on good buyer enthusiasm. According to the poll, there is substantial demand for property in Delhi-NCR across all price levels. The entire increase in…

Read more
istockphoto 1394786542 612x612 1

Aspire to be A Top Commercial Real Estate Agent? Here are Some Critical Steps To Becoming One

Do you want to be a successful commercial real estate agent? The Indian real estate market is diversified but vibrant and competitive, particularly for commercial real estate agents. To build a successful niche, they must comprehend the shifting promotional circumstances of developers as well as customer preferences. Staying current and afloat in the market requires innovation and openness to new marketing concepts. Follow the steps below to be a top agent. Do you want to be a successful commercial real estate agent? If this is the case, the first question you must answer is whether you want to work in commercial or residential real estate. To be sure, because individuals are more likely to buy or lease a place to live rather than a location to operate a company, it is simpler to get into residential real estate – where there will always be more prospective clients and transactions. Commercial real estate, on the other hand, may attract a large…

Read more
istockphoto 1263914795 612x612 1

Real Estate Investments: The Hottest Alternative Investments You Do Not Want To Miss Out

One of the best ways to grow your money in the modern era is by making investments. Whether small or large, every investment has got the potential to be a profitable one. It wasn’t long ago that people only knew about the stock market as a primary investment method. But, this has changed pretty much with the arrival of better technologies for making investments and making profits out of them. The hottest topic in the domain of investments is the growing popularity of alternative investments such as real estate. The real estate industry has been in existence for a long time, but it has changed a lot from its original form. Better alternative investments are emerging in real estate, mostly due to innovations introduced by technical firms. There’s still much to learn about this, so don’t worry. We have explained everything about this trending topic in this blog post. Do not miss Aspire financial freedom. Find Out How Real Estate Investment…

Read more