TL;DR
Compare rent with finance and running costs
The calculator estimates gross yield, a simplified net yield and monthly cash flow after an illustrative repayment mortgage and entered monthly costs.
It is not a lender stress test, property valuation, investment recommendation or tax calculation. Allow for voids, repairs, management, compliance, insurance and tax.
Calculator / tool
Buy to Let rental calculator
Gross yield, net yield and monthly cash flow
Gross yield compares annual rent with property value before costs. Net yield should deduct relevant running costs, but this calculator includes only the monthly cost entered by the user. Cash flow is the rent left after the modelled payment and entered costs.
- Gross yield does not show financing or running costs.
- Net yield depends on which costs are included.
- Cash flow can change after a rate or rent change.
- A positive month does not guarantee a profitable investment.
Mortgage assumptions and property running costs
The mortgage output uses a repayment calculation, while many BTL products are interest-only. Real costs can include void periods, agent fees, repairs, safety checks, licensing, service charge, ground rent and buildings insurance.
Tax and ownership structure are not included
Personal ownership and a limited company can have different mortgage, accounting and tax consequences. The calculator does not model income tax, corporation tax, finance-cost treatment, Capital Gains Tax or purchase taxes.
Example Buy to Let scenario
A £250,000 property with £1,200 monthly rent and a £62,500 deposit is tested against finance and £150 of monthly costs. Add realistic void and repair assumptions before relying on the cash-flow figure.
- Property value
- £250,000
- Deposit
- £62,500
- Monthly rent
- £1,200
- Entered monthly costs
- £150
Frequently asked questions
What is a good rental yield?
There is no universal target because location, risk, finance and running costs differ. Compare gross and properly calculated net yield with realistic cash flow and your investment objectives.
What is the difference between gross and net yield?
Gross yield divides annual rent by property value. Net yield deducts defined running costs first, so always check which expenses a quoted net figure includes.
Does the calculator include void periods and repairs?
Only if you convert them to a monthly allowance and include them in the costs input. Unexpected repairs and longer voids can still make the real outcome worse.
Does the calculator include Buy to Let tax?
No. Tax depends on ownership, income and circumstances. Ask a qualified accountant or tax adviser rather than relying on a yield calculator.
Is limited-company ownership better?
Not automatically. Mortgage pricing, fees, accounting, tax, extracting profit and future plans all matter. Obtain mortgage and tax advice before choosing a structure.
Will a lender use this cash-flow result?
Not necessarily. BTL lenders commonly apply their own ICR and stress-rate calculation to expected rent, and criteria vary by product, applicant and property.