In 2026, gross residential rental yields across India's major cities sit broadly in the 3% to 5% band, and among the three markets Property Point covers, Chennai and Bengaluru lead on yield while Gurgaon's yield has risen sharply even as a supply wave cools rent growth. The Magicbricks Rental Index for January to March 2026 put Chennai at 4.87% and Bengaluru at 4.19%, while ANAROCK Research shows Bengaluru's yield expanding to about 4.6% and Gurgaon's to about 4.3% as capital values re-rated.

Rental yield is simply your annual rent as a percentage of the property's price. It matters because it tells you how hard your capital works as income, separate from any price appreciation. This guide gives the real, cited numbers for Bengaluru, Gurgaon, and Chennai, then explains how to turn a headline gross yield into the net figure you actually keep.

How rental yield is calculated

Gross rental yield is annual rent divided by property price, times 100. Net yield subtracts the costs of owning and letting the home. Most published city figures are gross yields, so always check which you are reading.

  • Gross yield = (annual rent / property price) x 100.
  • Net yield = ((annual rent - annual costs) / property price) x 100, where costs include maintenance, property tax, insurance, repairs, and vacancy.
  • A home worth 1 crore let at 40,000 per month earns 4.8 lakh a year, a gross yield of 4.8% before costs.

Bengaluru: a yield that has climbed with demand

Bengaluru's deep IT-led rental demand has pushed both rents and capital values up, and yields have expanded as rent growth kept pace.

  • Gross rental yield: 4.19% in the Jan–Mar 2026 quarter (source: Magicbricks Rental Index, Q1 2026).
  • ANAROCK Research shows Bengaluru's yield expanding from about 3.6% to about 4.6%, a roughly 100-basis-point rise, alongside a large jump in capital values (source: ANAROCK Group rental-yield report, 2026).
  • The city is consistently cited among India's strongest residential rental markets, driven by sustained tenant demand near employment hubs.

Gurgaon: yields up, but a supply wave is cooling rents

Gurgaon (Gurugram) has seen capital values re-rate dramatically, lifting yields, but a surge in new supply is now moderating short-term rent growth — a nuance investors should weigh.

  • ANAROCK Research shows Gurgaon's yield rising from about 3.5% to about 4.3%, an roughly 80-basis-point gain, with average capital values climbing from about 6,150 to about 13,350 per sq ft — a jump of around 117% (source: ANAROCK Group rental-yield report, 2026).
  • In the Jan–Mar 2026 quarter, Gurugram recorded a roughly 10.4% quarter-on-quarter rise in rental supply while rents eased about 1.1% quarter-on-quarter (source: Magicbricks Rental Index, Q1 2026).
  • Takeaway: strong long-run re-rating, but a near-term supply overhang means underwrite conservatively on rent growth.

Chennai: the quiet yield leader

Chennai often surprises investors: steadier capital values relative to rents have kept its gross yield at the top of this three-city set in the latest index.

  • Gross rental yield: 4.87% in the Jan–Mar 2026 quarter, the highest among the three Property Point cities (source: Magicbricks Rental Index, Q1 2026).
  • ANAROCK's longer-run series shows Chennai's yield rising from about 2.7% in 2019 to about 3.25% by Q2 2026 — a reminder that different methods and baskets produce different numbers (source: ANAROCK Group rental-yield report).
  • The two sources differ because they measure different localities, unit mixes, and time windows — read each figure with its method, not as a single truth.

Why two credible sources disagree

Seeing Chennai at 4.87% in one report and 3.25% in another is not an error — it reflects method. Use this to read any yield figure critically.

  • Different locality baskets: a report weighted to premium micro-markets will show a lower yield than one covering mid-segment stock.
  • Different time windows: a single quarter versus a multi-year series.
  • Gross vs net, and asking-rent vs transacted-rent differences.
  • Always note the publisher, the period, and whether the figure is gross before comparing cities.

From gross yield to what you actually keep

A 4.5% gross yield is not 4.5% in your pocket. Subtract the real costs of letting a home to get a net figure, which is what should drive an investment decision.

  • Deduct society maintenance, municipal property tax, insurance, and a repairs reserve.
  • Budget for vacancy — even a strong market has gaps between tenants.
  • Account for income tax on rental income and any loan interest if the home is financed.
  • Net yields are typically well below gross; model your own numbers before buying for income.

The honest takeaway

For income today, Chennai and Bengaluru screen best among the three markets on the latest gross-yield data, while Gurgaon offers strong capital re-rating with a near-term supply caveat on rents. But residential yields in India remain modest in absolute terms — a home is usually a combined appreciation-plus-income bet, not a pure income asset.

Use published yields to compare cities and set expectations, then do the net-yield maths on the specific unit you are considering. The city average is a signpost; your return comes from the individual property, its locality, and its running costs.