The Hidden Cost of Rental Homes: Why Rent Rarely Covers EMI
Business
M
Moneycontrol•22-01-2026, 18:21
The Hidden Cost of Rental Homes: Why Rent Rarely Covers EMI
- •Many second home buyers expect rent to cover EMI, but this rarely happens in Indian cities due to low rental yields.
- •Annual rent often covers only 2-3% of property value, significantly less than home loan costs and additional expenses like maintenance and taxes.
- •Investors typically bridge the EMI-rent gap using monthly income, savings, or, riskily, high-interest borrowing.
- •The shortfall, often perceived as temporary, can accumulate into a substantial sum over years, draining other investments.
- •Understanding that rental income covering EMI is an exception, not the rule, is crucial for realistic property investment planning.
Why It Matters: Rental income rarely covers EMI in India; investors must plan for significant out-of-pocket expenses.
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