Top Indian Cities with Highest Rental Yields in 2025

Introduction

The real estate landscape in India has significantly evolved in 2025. As urbanization accelerates and people increasingly migrate to growing cities for work and education, the demand for rental properties is on the rise. Investors are now focusing on rental yields rather than only capital appreciation. This blog explores five Indian cities offering the highest rental yields in 2025, with detailed insights into their residential localities, real estate performance, and long-term investment prospects.

1. Bengaluru, Karnataka

City Overview:
Bengaluru continues to lead India's rental market. Known as the IT hub of India, it draws a large population of professionals, students, and entrepreneurs. The influx of tech workers and startup culture has led to consistent demand for rental housing.

Famous Areas and Facilities:

Malls: Phoenix Marketcity, Orion Mall, Garuda Mall

Parks: Cubbon Park, Lalbagh Botanical Garden

Employment Hubs: Electronic City, Whitefield, Manyata Tech Park

Educational Institutes: IIM Bangalore, Christ University

Why It Tops the Rental Yield Chart
The city benefits from large-scale infrastructure projects, such as Namma Metro Phase 2, Outer Ring Road expansion, and tech corridor development. These improvements drive up demand and returns.

Real Estate Growth Table – Bengaluru

Explanation
Rental yields in Bengaluru remain high due to constant job creation, demand for co-living spaces, and the IT sector’s continued growth in areas like Whitefield and Sarjapur.

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2. Pune, Maharashtra

City Overview
Pune’s rental market is supported by its strong presence in the IT and automobile sectors, a vibrant student community, and emerging infrastructure. It is also favored for its lifestyle, weather, and relatively lower cost of living than Mumbai.

Famous Areas and Facilities:

Malls: Phoenix Marketcity, Amanora Mall, Seasons Mall

Parks: Peshwe Park, Empress Garden

Employment Zones: Magarpatta City, Hinjewadi IT Park

Education: Symbiosis International University, Savitribai Phule Pune University

Rental Demand Drivers
The ongoing Pune Metro, Ring Road project, and smart city initiatives make Pune a consistent performer in rental returns, especially in areas near tech parks.

Real Estate Growth Table – Pune

Explanation
With a blend of working professionals and students, Pune offers stable rental returns. IT zones and affordable housing further enhance its real estate prospects.

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3. Ahmedabad, Gujarat

City Overview
Ahmedabad has emerged as one of the most promising cities in western India, thanks to its industrial growth and modern infrastructure. The rental market is growing quickly, especially in newly developed urban zones.

Famous Areas and Facilities:

Malls: Ahmedabad One Mall, Gulmohar Park Mall

Public Spaces: Kankaria Lake, Sabarmati Riverfront

Industrial Hubs: SG Highway, GIDC Estates

Religious Sites: Akshardham Temple, ISKCON Temple

Rental Market Strengths
Ahmedabad benefits from low property costs and rising rental demand due to increasing migration from smaller towns for jobs and education.

Real Estate Growth Table – Ahmedabad

Explanation
With developments like the Ahmedabad Metro and industrial growth, rental yields are high, especially in west and central Ahmedabad.

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Also read: Regulatory Crackdown in Gujarat Real Estate

4. Hyderabad, Telangana

City Overview
Hyderabad stands as a balanced city combining affordable real estate and strong economic development. The city is a hub for global tech firms and offers excellent public infrastructure.

Famous Areas and Facilities:

Malls: Forum Sujana Mall, Inorbit Mall

Parks: KBR National Park, Sanjeevaiah Park

Tech Corridors: HITEC City, Financial District

Attractions: Charminar, Hussain Sagar Lake

Why It Ranks High in Rental Returns
Hyderabad has maintained competitive property prices while expanding employment through the IT and pharma sectors. Low living costs and high quality of life also contribute to rising rental demand.

Real Estate Growth Table – Hyderabad

Explanation
Hyderabad offers a rare combination of affordability and tech-driven growth. Western zones are particularly sought after due to their proximity to major employment hubs.

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5. Indore, Madhya Pradesh

City Overview
Indore is a rising star among Tier-2 cities in India. Known for being India’s cleanest city and its growing infrastructure, it offers tremendous opportunities for rental property investments.

Famous Areas and Facilities:

Malls: C21 Mall, Treasure Island Mall

Parks: Meghdoot Garden, Nehru Park

Commercial Zones: Super Corridor, Vijay Nagar

Academic Institutions: IIM Indore, DAVV University

Drivers of Rental Growth
With the development of Super Corridor, Indore has seen a spike in demand for rental properties, especially from students, professionals, and business owners.

Real Estate Growth Table – Indore

Explanation
With rapid infrastructure and industrial expansion, Indore delivers high rental yields at a low entry cost. This makes it attractive for new real estate investors seeking long-term returns.

Check flats for sale in Indore or rental flats in Indore.

Also read:

Fastest Growing Cities in India 2025

Biggest Real Estate Projects in India 2025