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.