Why PGs Make Money Where Flats Don't
A 2BHK flat in Koramangala might rent for ₹35,000 per month. The same 2BHK, converted to a 4-bed PG with food included, can gross ₹48,000 to ₹72,000 per month. That is 35 to 100 percent more revenue from the same property. The trade-off: PG is operations-heavy. You are not a landlord anymore, you are running a small hospitality business — with food, housekeeping, maintenance, and compliance. The math works, but only for owners ready to engage.
Licences and Legal Compliance
PG is a regulated business in most Indian cities. You need multiple registrations before opening doors.
- →Trade Licence from Municipal Corporation — ₹1,500 to ₹15,000 annually depending on city and room count
- →Health Licence / Eating House Licence (if serving food) — ₹500 to ₹10,000 annually
- →FSSAI Registration (if food served) — Basic ₹100/year; State ₹2,000/year
- →Fire NOC — depends on size; mandatory for 5-plus rooms in most states
- →Police Verification of all tenants — mandatory every move-in
- →Society NOC (if inside a housing society) — often the biggest blocker
- →GST registration if monthly revenue exceeds ₹20 lakh annually
- →Property tax reclassification — PG is commercial use in most cities, higher rate
Room Configuration: Single vs Double vs Triple Sharing
Single sharing commands 50 to 80 percent premium over triple sharing but fills slower. Double is the sweet spot in most cities. A typical conversion strategy for a 2BHK: convert the master bedroom into a single (₹16,000 to ₹22,000 per month), the second bedroom into a double (₹11,000 to ₹15,000 per bed, so ₹22,000 to ₹30,000 total), and keep the hall/living as a common area. Total revenue from one 2BHK: ₹38,000 to ₹52,000 before food. With food: ₹52,000 to ₹72,000.
Pricing Strategy by City
Market rates vary widely. Here is the 2026 band for working professional PGs (with WiFi, food, housekeeping) in top metros.
- →Bangalore (Koramangala, HSR, Indiranagar): Single ₹16,000-25,000; Double ₹10,000-14,000
- →Pune (Hinjewadi, Kharadi, Baner): Single ₹12,000-18,000; Double ₹8,000-12,000
- →Mumbai (Andheri, Powai, Thane): Single ₹18,000-30,000; Double ₹12,000-18,000
- →Hyderabad (Gachibowli, Madhapur): Single ₹12,000-18,000; Double ₹8,000-12,000
- →Gurugram (Cyber City adjacent): Single ₹15,000-22,000; Double ₹10,000-14,000
- →Chennai (OMR, Velachery): Single ₹11,000-16,000; Double ₹7,000-10,000
- →Delhi (Karol Bagh, Laxmi Nagar, Mukherjee Nagar): Single ₹10,000-16,000; Double ₹6,000-10,000
- →Lucknow (Hazratganj, Aliganj for UPSC): Single ₹8,000-14,000; Double ₹5,500-8,500
Food Operations: In-House vs Tie-Up vs Skip
Food is the single biggest operational headache and also the biggest revenue differentiator. Three models: in-house kitchen with a cook (best margins, highest hassle, requires FSSAI), dabbawala / tiffin tie-up (zero kitchen hassle, lower margin, tenants rate it lower), or food-free PG at 15 to 25 percent lower rent (simplest, attracts independent cookers). For a 10-room PG, in-house kitchen costs ₹35,000 to ₹55,000 per month for cook + raw material + gas and can add ₹2,500 to ₹4,000 per tenant per month on the rent — net margin 40 to 60 percent on food. Scale matters: below 8 tenants, tie-up is better economics.
Housekeeping and Maintenance Staffing
For 6 to 15 beds, one housekeeper coming 6 days a week (₹10,000 to ₹14,000 per month) handles mopping, common area cleaning, linen change. Laundry is usually separate — either outsourced at ₹300 to ₹500 per tenant per month or handled by the tenant. A local plumber and electrician on call (₹400 to ₹800 per visit) plus a rotating maintenance budget of ₹1,500 per bed per year covers most issues. For 15-plus beds, consider a part-time caretaker.
Tenant Acquisition: Where PG Leads Come From
Four primary sources in 2026: online listing platforms (IndiaRentalHub, NoBroker, Nestaway) deliver 55 percent of leads; walk-ins from neighbourhood / word-of-mouth deliver 25 percent; Google My Business listing with local SEO delivers 10 percent; Instagram and social media deliver 10 percent for younger PGs. List on IndiaRentalHub first — it is free and covers all segments. Good PG listings with 8 to 12 photos and clear pricing fill 80 percent of beds within 4 to 8 weeks in tier-1 cities.
Common Mistakes First-Time PG Operators Make
Skipping trade licence and fire NOC — gets you shut down during routine inspection. Accepting under-age minors or mixed-gender PG without explicit local approval — legal grey zone, complaint risk. Under-pricing early to fill fast — very hard to raise rates on sitting tenants later. Over-investing in furniture for triple-share rooms — does not translate to rent. Not collecting deposit equal to 2 months' PG rent — increases default loss dramatically. Running food without FSSAI — small issue until it is a big issue.
Financial Model: What a 10-Bed PG Actually Earns
Concrete example from a Bangalore HSR 3BHK converted to 10-bed PG. Gross monthly revenue: ₹1,15,000 (4 singles at ₹18K + 6 doubles at ₹12K, minus 10 percent vacancy factor) + food ₹35,000 (₹3,500 x 10) = ₹1,50,000. Costs: rent to flat owner ₹45,000, food and cook ₹45,000, housekeeping ₹12,000, utilities ₹10,000, maintenance ₹5,000, miscellaneous ₹8,000 = ₹1,25,000. Net monthly profit: ₹25,000 per month on an invested capital of ₹5 to 8 lakh for furnishing and deposits. Payback: 20 to 30 months. Not bad — but consider this is active-management income, not passive rent.