Bengaluru 5-bed condo at ₹47,180,000: does ₹174,400 rent work?

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PlainStory

Property investor
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I’m assessing a 5-bed condo in Bengaluru priced at ₹47,180,000, with expected rent of ₹174,400 per month. The headline gross yield is about 4.4%, but I modelled only eleven rented months, plus management, routine maintenance, vacancy and one larger-repair reserve. The building appears sound, although insurance could materially alter the result.

I’m concerned that the repair reserve is still too light. Which local ownership cost am I most likely missing—property tax, building charges, insurance or turnover expenses—and what net yield would justify the risk for you?
 
Using eleven months, collected rent would be ₹1,918,400, roughly 4.1% of the purchase price before any expenses. That leaves limited room for the costs you listed. I would separate building or association charges from repairs, since recurring charges can quietly consume cash flow.

Is ₹174,400 supported by comparable signed rents, and is the condo furnished? Furnishing and tenant-change costs could make a big difference for a 5-bed unit.
 
The 4.1% figure is a useful correction; I was mentally carrying the twelve-month headline number. The management and maintenance assumptions are separate, but I have not yet broken out the building charges or obtained firm insurance pricing. The ₹174,400 is still an expected rent rather than a signed lease.

Would you treat a major-repair reserve as a percentage of rent, or build it from likely replacement items in the unit?
 
For this property, I’d build the reserve item by item rather than use a reassuring percentage. Five bedrooms can mean more fixtures, bathrooms and air-conditioning equipment to maintain, depending on the layout. Also stress-test the rent itself: a larger unit may have a narrower tenant pool, so one vacant month may not capture both marketing time and negotiation on rent.
 
I wouldn’t reject it solely because the starting yield is thin. The answer changes with the buyer’s objective, expected holding period and financing. A heavily financed purchase is much more sensitive to interest cost and vacancy than an unlevered one.

Rather than choose a target net yield in isolation, I’d run three cases: full expected rent, a lower achieved rent, and a longer turnover period. Add property tax, building charges, insurance, management and reserves separately. If the conservative case needs appreciation to look acceptable, then it is primarily an appreciation bet, not a rental-income deal.
 
Agreed on separating income from appreciation, but I’d go further: don’t count the building looking sound as evidence that the reserve is adequate. Ask for the building’s charge history and any planned major work, then price insurance and property tax before negotiating. I would also verify who bears routine building charges under the intended lease. Until those figures and rent comparables are firm, the 4.4% headline is not decision-grade.
 
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