Rental Yield Calculator Pakistan
See what a property really earns. Enter the value and monthly rent, factor in vacancy and maintenance, and compare the gross and net yield against typical Pakistani returns.
Use the current market price (what you would pay today), not the price you bought at.
1% per year is a common rule of thumb; older houses cost more to maintain.
Months the property sits empty between tenants — 1 month/year is realistic.
Provincial property tax, society charges, agent commission — anything you pay yearly.
Within the typical 3–6% gross range for Pakistani residential property.
Context: Pakistani residential gross yields typically run 3–6%; commercial property runs 6–9%. Yield ignores capital gains — a low-yield plot can still outperform if prices rise.
What is rental yield and why it matters
Rental yield is the annual rent a property generates expressed as a percentage of its value — the property market's equivalent of an interest rate. Gross yield uses the headline rent; net yield deducts the costs landlords actually face: vacancy between tenants, maintenance and repairs, property tax and society charges. Net yield is the number to compare against National Savings certificates, bank deposits or mutual funds when deciding whether a property earns its keep.
Why Pakistani investors under-weight yield
For decades the Pakistani market rewarded buying plots and waiting — capital gains dwarfed rental income, and files in new societies traded like shares. The result is a market where many investors never compute yield at all. That works while prices climb, but in flat or falling markets a property yielding 2% gross quietly loses to inflation. Serious investors look at total return: yield plus realistic appreciation, net of taxes and transaction costs. A high-yield property also keeps paying you while you wait, which a vacant plot never does.
Houses vs flats vs commercial — typical yields
- Houses — usually 2–4% gross. Land value dominates the price, but tenants pay rent for living space, so yields are lowest where land is dearest.
- Flats / apartments — usually 4–7% gross. Lower entry price relative to rent makes them the yield play in Lahore, Karachi and Islamabad.
- Commercial (shops, offices) — usually 6–9% gross, with longer leases but higher vacancy risk and bigger tenant-quality swings.
Hunting for an income property? See our guide to the best areas to invest in Lahore and browse current rental listings to benchmark achievable rents before you buy.
Frequently Asked Questions
What is a good rental yield in Pakistan?
Residential property in Pakistani cities typically yields 3–6% gross per year — flats often sit at the higher end and houses in premium areas at the lower end. Commercial property (shops, offices) typically yields 6–9%. Anything above 6% gross for residential is good; below 3% means you are paying mostly for expected capital gains.
How do I calculate rental yield?
Gross yield = (monthly rent × 12) ÷ property value × 100. Net yield subtracts real costs first: deduct vacancy (months the property sits empty), annual maintenance and repairs (about 1% of value is a common rule of thumb), property tax and any society or agent charges, then divide by value. Net yield is the honest number to compare against bank deposits or savings certificates.
Why are rental yields in Pakistan so low compared to other countries?
Because property prices have historically been driven by capital gains expectations, file trading and parking of wealth rather than rental income. Prices rise faster than rents, compressing yields. This is also why flats — which appreciate more slowly but rent relatively well — often out-yield houses, and why commercial property out-yields both.
Do flats give better rental yields than houses?
Usually yes. A flat in Lahore, Karachi or Islamabad commonly yields 4–7% gross because the purchase price is lower relative to achievable rent, while a house in a premium society may yield only 2–4% since land value dominates its price but rent is paid mainly for the covered living space. Houses, however, tend to appreciate faster because of that land component.
Is rental income taxable in Pakistan?
Yes. Rental income is taxable under the Income Tax Ordinance at progressive slab rates, and tenants who are companies or government bodies withhold tax on rent payments. Provincial property tax (based on annual rental value) also applies in urban areas. Factor these into the "other costs" field when computing net yield, and confirm current slabs with FBR or a tax adviser.