What the property actually returned
The compound annual return a property actually delivered, including rent, and how it compares against the alternative the owner passed up.
Your numbers
| Total invested | — |
| Net if sold today | — |
| Net rent over the period | — |
| The alternative would be worthWhat the same money at the alternative rate would have become. | — |
| Against the alternative | — |
"It's doubled since I bought it" is the most common sentence in Indian property, and it usually describes a mediocre annual return spread over a long time.
A property that doubles in twelve years compounded at about 5.9% a year — before the stamp duty paid on the way in, the maintenance paid throughout and the brokerage paid on the way out.
This works out the honest figure. It is a useful reality check for an owner deciding whether to hold, and it is a credibility builder for the agent willing to show it.
The formula
CAGR = (ending value ÷ starting value)1/years − 1. The honesty is entirely in what goes into each side.
Starting value should include the stamp duty, registration and brokerage paid on the way in — that money was invested too. Ending value should be net of the cost to sell. And for a self-occupied property, the maintenance and tax paid over the years are a genuine drag that a pure price comparison ignores.
Worked example
Bought at ₹42 lakh with ₹3.8 lakh of costs — ₹45.8 lakh invested. Worth ₹80 lakh today, net ₹78.4 lakh after 2% selling costs, held twelve years, self-occupied at ₹5,000 a month of running cost.
On price alone the CAGR is about 5.5%. Including acquisition costs and twelve years of ₹5,000 a month, the all-in figure drops to about 3.75%. The owner's version of this story is "it nearly doubled".
Both are true. Only one of them is comparable against anything else.
Why show an owner this
Not to talk them out of property. To make the hold-or-sell decision a real comparison rather than a feeling, and because an agent who produces an unflattering number when it is the true one is the agent they trust with the transaction.
Ignores tax on both rental income and capital gains, which affects both sides of the comparison. Not investment advice.
Questions
Why is the all-in return lower than the price appreciation?
Because acquisition costs increase what was really invested, selling costs reduce what is really realised, and the years of maintenance on a self-occupied flat were real money. The price-only figure ignores all three.
Should self-occupied running costs count as a drag?
For a pure investment comparison, yes — though the owner also received somewhere to live, which is worth what they would otherwise have paid in rent. Enter that as net rent if you want to see it both ways.
Is property a bad investment if the CAGR looks modest?
Not necessarily. It is leveraged, it forces saving through the EMI, and it provides shelter. But the return should be stated accurately before those arguments are made, not instead of it.
The number convinces. The reel gets you the call.
Buyers who run these numbers are ready to talk. PropVid turns a listing into a reel in under two minutes — 700+ templates, AI scripts, voiceover, and your logo and phone on every export.
Try PropVid free