Delhi 2-bed duplex at ₹22,540,000 with ₹109,800 monthly rent — does the yield hold up?

S

StillPorch

Real estate agent
Established
I’m assessing a 2-bed duplex in Delhi priced at ₹22,540,000. Expected rent is ₹109,800 per month, putting the headline gross yield near 5.8%.

The building looks sound, but that number could deteriorate quickly after vacancy, management, routine maintenance and a reserve for one larger repair. I also need to pin down insurance and property tax. Which local cost am I most likely to be underestimating, and what net yield would justify the risks for you?
 
The first number I’d challenge is the rent, not the maintenance estimate. Is ₹109,800 supported by an existing lease or merely the expected asking rent? Also, do you have an itemised figure for the building’s recurring charges and clarity on which, if any, are paid by the tenant? Without those answers, 5.8% is only a marketing calculation.
 
Fair point. The ₹109,800 is an underwriting assumption rather than income I’m treating as guaranteed. I also don’t yet have a sufficiently detailed breakdown of the recurring building charges, so I’m assuming they remain with the owner until documentation shows otherwise. I’ll rerun the model with lower achieved rent as well as a vacant period.
 
Tenant turnover may be the overlooked cost. It is not just empty months: cleaning, repainting, small repairs and the expense of finding the next tenant can arrive together. For a duplex, I’d also ask whether every internal feature is maintained by the building or falls entirely to the owner. Get past bills rather than relying on a single monthly maintenance quote.
 
I’d be cautious about choosing an acceptable net yield in isolation. The same net percentage can represent very different risks depending on lease stability, resale appeal and how concentrated this purchase is within your finances. Personally, I would want a meaningful margin between the realistic net return and a simpler alternative; a gross 5.8% does not leave much room for optimistic assumptions.
 
Agreed on stress-testing the rent, though I wouldn’t automatically reject it because the starting yield is modest. Financing could decide the case. Model the actual interest and principal payments separately, then test a higher borrowing cost, lower rent and a major repair occurring in the same year. A property can show positive operating income before debt while still producing negative cash flow after financing.
 
I partly disagree with setting one repair reserve and calling the downside covered. Older or more complex buildings can produce uneven expenses, while a newer one may have fewer unit repairs but higher common charges. Ask for several periods of maintenance demands, property-tax records, insurance pricing and any planned building work. The pattern matters more than one average figure.
 
I’d make the decision conditional: verify comparable achieved rents, obtain the full recurring-charge breakdown, price insurance, confirm property tax, and budget one complete tenant change. Then calculate net yield on the total cash committed, not just ₹22,540,000 if there are additional acquisition or setup costs. If the deal only works with full occupancy and ₹109,800 from month one, the margin is too thin.
 
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