Is property or a mutual fund the better investment?

It depends on the price you pay, the rent you can get, the growth you assume and how long you hold. At a 3% rental yield and 6% price growth a flat has to work hard to match a 12% equity assumption after costs; at higher growth it can win. Set each number and see where the answer turns.

Why does the calculator count stamp duty and maintenance?

Because they are real costs that brochures leave out. Stamp duty and registration add about 6% to the price before the flat has earned anything, and maintenance, repairs and vacancy eat into rent every year.

Separately: rent is taken after the 30% standard deduction and tax at your slab and added to the final figure, while price growth applies to the purchase price. The two together are what the flat is worth to you at the end.

How is a property sale taxed?

Gains on property held over 24 months are long-term, taxed at 12.5% without indexation for purchases after 23 July 2024 (earlier purchases can choose 20% with indexation). Section 54 and 54EC exemptions can reduce the tax; the 54EC calculator covers the bond route. Confirm with a chartered accountant.

What return should I assume for the mutual fund option?

A rate for the category you would use over that horizon: 10% to 12% is a common planning assumption for equity funds over 15 to 20 years, lower for hybrid or debt. Run it at two rates. The figure is an assumption, not a forecast.

Financial calculatorsReal Estate vs Mutual Fund Calculator

Real Estate vs Mutual Fund Calculator

Buy a flat to let out, or invest the same money?

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Flat price₹1 CrYears held20 yrProperty price growth (p.a.)6%Home loan rate (p.a.)8.5%FD rate (p.a.)7%Mutual fund return (p.a.)12%

Same money in each

₹26 L upfront + ₹69,426 a month for 20 yr

Worth after 20 years, after tax

Flat, let out₹3.68 Cr
FD + RD₹3.57 Cr
Mutual funds + SIP₹8.02 Cr

Ahead of the flat: Mutual funds + SIP, by ₹4.34 Cr.

20% down payment, 20-year loan; stamp duty 6%; rent 3% of the price a year, rising 5%; maintenance counted; 30% tax slab; current capital gains tax. Illustration, not a forecast; mutual funds are subject to market risks.

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How this calculator works

Choose how the flat is bought. On a home loan, the down payment and stamp duty go into a lumpsum and each EMI into a SIP or recurring deposit instead; in cash, the whole amount goes in as a lumpsum. The flat earns rent and grows in value, less maintenance, the remaining loan and capital gains tax. Every option gets the same money, and each result is what it is worth at the end, after tax.

What does the real estate vs mutual fund calculator compare?

It compares buying a flat to let out with investing the same money in a fixed deposit or in mutual funds, after tax, over the same years. On a home loan, the down payment and stamp duty become a lumpsum and each EMI becomes a SIP or recurring deposit; bought in cash, the whole price goes in as a lumpsum. The flat earns rent and grows in value, less maintenance, the loan still owed and capital gains tax.

The assumptions it uses

0120% down payment, 20-year loan, stamp duty at 6% of the price.
02Rent at 3% of the price a year, rising 5% a year; maintenance at 0.04% of the price a month, rising 5% a year.
03Tax at the 30% slab, with the 30% standard deduction on rent and the ₹2 lakh cap on home-loan interest.
04Long-term capital gains tax at 12.5% on the flat and on equity funds (above ₹1.25 lakh a year); FD and RD interest at slab.

Questions people ask

It depends on the price you pay, the rent you can get, the growth you assume and how long you hold. At a 3% rental yield and 6% price growth a flat has to work hard to match a 12% equity assumption after costs; at higher growth it can win. Set each number and see where the answer turns.
Because they are real costs that brochures leave out. Stamp duty and registration add about 6% to the price before the flat has earned anything, and maintenance, repairs and vacancy eat into rent every year.
Separately: rent is taken after the 30% standard deduction and tax at your slab and added to the final figure, while price growth applies to the purchase price. The two together are what the flat is worth to you at the end.
Gains on property held over 24 months are long-term, taxed at 12.5% without indexation for purchases after 23 July 2024 (earlier purchases can choose 20% with indexation). Section 54 and 54EC exemptions can reduce the tax; the 54EC calculator covers the bond route. Confirm with a chartered accountant.
A rate for the category you would use over that horizon: 10% to 12% is a common planning assumption for equity funds over 15 to 20 years, lower for hybrid or debt. Run it at two rates. The figure is an assumption, not a forecast.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Figures are illustrations at an assumed rate, not a forecast. Talk to us to match a plan to your goals.