How PG profit is calculated
PG profit is simple in theory: money from filled beds minus the cost of running the building. The calculator above works it out like this:
- Monthly income = total beds × occupancy × average rent per bed.
- Monthly costs = building rent + electricity + water + staff + internet + repairs + other costs, plus food for every filled bed.
- Monthly profit = income − costs (before income tax).
- Break-even = the number of filled beds needed just to cover your costs.
- Payback period = one-time setup cost ÷ monthly profit. The refundable deposit you pay the building owner is not counted here, because you get it back.
Why occupancy matters more than rent
A quick story. Two friends (an example) each open a 30-bed PG on the same street with the same costs. Kiran charges ₹9,500 a bed but lets beds sit empty while he waits for the "right" tenant, so he averages 70% occupancy. Naveen charges ₹8,500, answers every enquiry quickly and keeps his PG 95% full. At the end of the month, Naveen earns more, even though his rent is ₹1,000 lower. Try it yourself: change the occupancy slider above and watch the profit move.
Most of a PG's costs, like building rent, staff and electricity, stay the same whether a bed is full or empty. So every extra filled bed adds almost its full rent to your profit.
Typical costs of running a PG
- Building rent or lease: usually the biggest cost, unless you own the property.
- Food: groceries, gas and a cook, if meals are included.
- Staff: cook, cleaner, security or warden.
- Utilities: electricity, water and internet. Electricity jumps in summer when ACs and coolers run.
- Repairs and upkeep: plumbing, painting, appliance repairs and replacements.
- One-time setup: beds, mattresses, cupboards, interiors, appliances and the deposit to the building owner.
5 ways to improve PG profit
- Keep beds full. Track which beds free up and when, and start looking for the next tenant during their notice period.
- Collect rent on time. Late rent is lost working capital. See our guide on collecting PG rent on time.
- Charge electricity fairly. If AC rooms use more power, charge by meter or a fixed AC fee, and write it into your rental agreement.
- Watch food costs weekly. Small daily waste adds up to thousands a month.
- Know your real numbers every month, not just once a year.
Track real profit every month
This calculator gives you an estimate. PG ZONE shows your actual numbers: rent collected, dues, expenses and staff salaries, with a profit and loss report for each building. It also sends automatic SMS rent reminders, so income arrives on time.
Frequently asked questions
Is a PG business profitable in India?
It can be, but profit depends heavily on location, building rent, occupancy and how well the PG is managed. Use the calculator with real numbers from your area before you invest.
What occupancy should I plan for?
Plan conservatively. Beds empty out between tenants and during off-seasons, so check the "profit at different occupancy" table and make sure the PG still makes money at lower occupancy.
Does the calculator include tax?
No. The profit shown is before income tax and any GST that may apply to your business. Ask your accountant about tax for your situation.
Are my numbers saved?
Your numbers are saved only in your own browser, so they are still there next time. Nothing is uploaded. Click "Reset example" to start over.
More free tools for PG owners
- PG Rent Receipt Generator: HRA-ready receipts, print or PDF on WhatsApp
- PG Rental Agreement Generator: a ready-to-sign PG rental agreement
- PG Business Profit Calculator: monthly profit, break-even and payback