Rental deal in Delhi: ₹97,280,000 purchase, ₹291,100/month — sanity check?

[StillPorch]

If the rent is interrupted or a major repair lands at the wrong time, this deal could produce very little income despite the purchase price. The Delhi 1-bed condo is priced at ₹97,280,000 and the expected rent is ₹291,100 per month, giving annual rent of ₹3,493,200 and a gross yield of roughly 3.6%.

I have allowed for ordinary vacancy, management, ongoing upkeep and a separate maintenance reserve, but the margin still looks thin. Which Delhi ownership or letting expenses should I verify before treating that rent as usable income? I would also like to test the figures against financing costs and a stressed period combining vacancy with a larger repair. What net return would make that risk worthwhile?

 

[kit_reese]

Tenant turnover may be the bigger omission rather than a single annual expense. Model vacancy, any leasing or brokerage cost, cleaning and minor work as one combined turnover event.

Also clarify whether ₹291,100 includes society maintenance and whether the landlord pays it. I’d want the actual property-tax, society-charge and insurance amounts before treating 3.6% as meaningful. Is that rent supported by completed lettings or only an asking figure?

 

[SmallPaper]

Even if the rent is achievable, I think the gross yield is too thin to discuss a target net yield without financing details. Interest-rate sensitivity could overwhelm the rental cash flow if debt is involved.

I’d also separate routine vacancy from a stressed case where a repair and tenant departure happen together. Averages can hide that cash demand.

 

[StillPorch]

Good points. The ₹291,100 is still an expected figure, so I need evidence of sustained rents rather than listings. I also haven’t confirmed whether society charges are included or passed through, and financing is not fixed yet.

I’ll rebuild this as cash and debt cases, with turnover costs grouped together as Naomi suggested. For the stress case I’ll overlap vacancy with the larger repair instead of assuming they occur in different years.

 

[sam_leases]

I disagree slightly with dismissing it solely because 3.6% looks thin. The real comparison is the verified net return against your alternatives, after tax and financing, plus whatever value you place on liquidity and concentration risk.

Still, the rent needs to carry the valuation. Run at least zero, one and several vacant-month scenarios. One empty month alone removes ₹291,100 before management, maintenance, insurance, property tax or turnover spending.

 

[woodworksAndView]

Before making an offer, turn every uncertain item into either a confirmed amount or a deliberately harsh allowance: sustainable rent, society charges, property tax, insurance responsibility, management, turnover and repairs. Local treatment and responsibility can vary, so verify them for this condo rather than relying on a generic Delhi estimate.

Then calculate the price supported by your required return: sustainable annual net rent divided by your target net yield. I’d require that yield to beat a lower-risk after-tax alternative by a meaningful margin; otherwise the vacancy and concentration risk are not being compensated.