How to Calculate Return on Property Investment
How to calculate rental yield, ROI, and total return on property investment in Pakistan.
By ilaan Editorial Desk
Updated 4 Jul 2026
Key Metrics for Property Investment
Three numbers matter most: Rental Yield, Capital Appreciation, and Total Return. Understanding each helps you compare properties and make better decisions.
Gross Rental Yield
Formula: (Annual Rent / Property Price) × 100
Example: Property PKR 1.5 Cr. Monthly rent PKR 60,000 = Annual rent PKR 7.2 lakh. Gross yield = (7.2 / 150) × 100 = 4.8%
Net Rental Yield
Formula: ((Annual Rent - Annual Expenses) / Property Price) × 100
Annual expenses: Property tax PKR 12,000. Maintenance PKR 24,000. Vacancy (1 month/year) PKR 60,000. Total expenses: PKR 96,000. Net annual income: PKR 7.2 lakh - PKR 96,000 = PKR 6.24 lakh. Net yield = (6.24 / 150) × 100 = 4.16%
Capital Appreciation Return
If property appreciated 12% this year: PKR 1.5 Cr × 12% = PKR 18 lakh gain.
Total Return Calculation
Total return = Rental income + Capital appreciation - Costs. In our example: PKR 6.24 lakh (net rent) + PKR 18 lakh (appreciation) = PKR 24.24 lakh on PKR 1.5 Cr investment = 16.16% total return.
Comparing vs Other Investments
Pakistan T-bills (2026): ~11% yield. Gold: ~15-20% historically. Bank deposits: 10-12%. Property (our example): 16.16% PLUS leverage benefit. If you put PKR 45 lakh down (30%) and borrowed the rest, your ROI on actual capital is much higher.
Using ilaan.com Investment Calculator
Try our free tool at ilaan.com/tools/investment-calculator to compare property vs gold vs bank deposits over 10 years with your specific numbers.
