The rental yield in India is quite low, it's around 2 to 4 percent. So if you have a 1 Cr house, the rent expected can be around 20 to 40 thousand. 40 thousand is also depend on the location. One of my collegue has just got into a new apartment whose market value is around 80 Lakhs and he is giving a rent of just 26K.
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So why people usually go for this big apartment and just get peanuts. Previously in India, most of the black money was directed towards the property prices. So whoever wants to convert their black money to white, they used to invest in the property so for them rental yield doesn't used to bother. But now it's totally different, all the money has to be white and also most of the people buy it on loan. So now buying a house just for giving it on rent doesn't make much sense.
But if we compare it with the AirBnb then you can easily earn around 10% from it. But the thing is doing commercial activity in the apartment like AirBnb might not be allowed. This is where buying a land and creating houses or taking it on lease makes sense. I know buying house and constructing will incur a huge Capex. But if you are considering the passive income with it, then it's a great way for that.
You can also construct a house for yourself and create small houses for AirBnb. The only thing we have to consider for AirBnb is the location. If you have a good location or your house, AirBnb is great and can yield you a great returns. Recently one of our neighbour has constructed a 2nd floor in their existing house, and the price came around 15Lakhs and they have given the rent for 7K, I.e. around 4.5%. But if they can run an AirBnb with additional investment of 1Lakh then they can easily earn from 7K to 15K that means 4.5% to 10%.
That means the yield just got increased which can actually be a great source of passive income.