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In-depth ROI and profit calculations for your rental

Buy to Let ROI Calculator

This buy to let ROI calculator will help you assess the profitability of any potential investment property.

Property research graphic

What Does the Buy to Let ROI Calculator do?

This tool will calculate the ROI of your potential buy to let, and also provide an in-depth analysis of the investment by looking at often overlooked metrics, such as cash-on-cash return, gross yield, long-term ROI, and IRR (Internal Rate of Return). This allows you to go beyond the basic profit calculations, giving you a complete picture of the property’s potential.

Why Use Our Buy to Let ROI Calculator?

Before you commit to an investment, a thorough analysis is essential. Our calculator ensures that you don’t overlook any significant factors that could impact your returns. It’s all too common for investors to focus solely on short-term profits, neglecting long-term viability. This calculator bridges that gap by providing you with metrics like long-term ROI and IRR, allowing you to make informed choices that align with your investment goals. 


Plus, as you enter the property’s address, the calculator automates the process by populating some of the data, making it incredibly easy to use.

How to Use the BTL ROI Calculator - Step by Step

1. Enter the Property Address

If you have the address, great! If not, we have a quick guide on how to find a property’s full address on Rightmove or Zoopla. The tool will provide you with useful property information such as the EPC level, total floor area, the average yield in that postcode and the average yearly growth in that postcode over the past 5 years. Where possible, this data will be autofilled into the tool.


2. Purchase Details

Here is how you would work out the property value and here is how you would work out the expected monthly rent. Here is a stamp duty calculator. For average closing and refurb costs, please find rough numbers below.


3. Loan Details

If you’re purchasing with cash, simply set the LTV to 0%. If you’re unsure of what the rates currently are, you can find them here.


4. Monthly Operating Costs

Landlord insurance is a must have and will usually set you back £30 a month. If you opt to use a lettings agent to manage your property, the average management fee is 12% of monthly rent (10% plus VAT).


5. Long Term Assumptions

If you entered the address into the tool, these should have been autofilled. If not, there’s a button above the long term metrics titled ‘Postcode Info’ – this will take you to Lendlord’s free postcode tool (It requires you to create a free account) which will help you find this info. Annual rent appreciation should be set at between 3% and 5% to keep up with inflation.


6. Your Results

To save the results or to create a summary report, press the respective button and create a free account with Lendlord


7. Great ROI? 

If the numbers stack up and you’re looking at a great rental property ROI, consider your next steps with our free online financing brokers:

Understanding the Results

Explanations of each metric and why they’re important are available below the calculator. In case you weren’t sure of some of the figures you’ve entered, we provide rough figures for costs like closing costs, management fees and average annual appreciation values.

Create a Free Lendlord Account

If you find this tool useful, be sure to create a free Lendlord account (this tool was was made possible thanks to them) so that you can use this buy to let profit calculator often, and to save your results.  If you’re looking for more tools to help you evaluate your investment, check out our list of the best 4 property investment tools.

Metric Explanations - Their meaning & Importance

Net Annual Cash Flow

Meaning: The net annual cash flow is the amount of money that remains after deducting all expenses from the rental income. Operating expenses include property management fees, maintenance costs, insurance, and more. 

Importance: It indicates the actual amount of profit you can expect to receive from the property each year. It’s by far the best way to understand your buy to let’s profitability.

Cash on Cash Return

Meaning: The cash on cash return, otherwise known as ‘return on capital employed’ (ROCE), is the return made based on the cash you have invested into the property. It takes into account your mortgage deposit (or cash put down) and any other upfront costs. 

Importance: This metric provides a quick snapshot of the return you’re earning on the cash you’ve invested, which helps you evaluate the profitability of your investment in relation to the capital you’ve committed.

Gross Yield

Meaning: The gross yield is the annual rental income generated by the property divided by the property’s total cost (purchase price plus any additional costs like closing costs and repairs). This percentage represents the property’s income-generating potential without factoring in expenses. 


Importance: Gross yield is useful for quickly comparing different investment opportunities.

First Year ROI (Return on Investment)

Meaning: The return you’re likely to earn on your investment during the first year. It considers both the rental income and the property’s appreciation. 

Importance: This metric is essential because it provides a clear idea of the immediate return you can expect from the property, accounting for both income and potential property value increase.

Cap Rate (Capitalisation Rate)

Meaning: The cap rate is the net income of the property divided by its current market value. It’s expressed as a percentage. 

Importance: Cap rate helps you understand the rate of return you’d earn from an investment if you paid for the property in cash, without considering financing. It’s a widely used metric for comparing the potential returns of different properties in different markets. A higher cap rate often indicates a higher potential return, but it’s important to consider other factors like risk and market conditions.

Long Term ROI (Return on Investment)

Meaning: The Long Term ROI is a measure of the overall return on your investment over an extended period (typically 10 or 20 years), taking into account both the property’s appreciation in value and the rental income generated. 

Importance: It’s important because it accounts for both short-term and long-term gains, giving you a better understanding of your investment’s potential. This helps you to avoid investments which may perform well initially but let you down in the long term.

IRR (Internal Rate of Return)

Meaning: The Internal Rate of Return (IRR) is a complex metric that calculates the rate at which your investment grows over time, taking into account both cash flow and value of money over time. In other words, it’s the amount of interest you would earn on each pound/dollar you have invested.

Importance: IRR considers not only the initial investment but also future cash flows, providing a more accurate picture of your returns.


Meaning: Equity refers to the value of the property that you own outright, calculated by subtracting the outstanding mortgage balance from the property’s market value. As you make mortgage payments and the property appreciates, your equity increases. 

Importance: Equity is vital because it represents your ownership stake in the property, which can be leveraged for future investments or used to assess the property’s overall value to you.

DCR (Debt Coverage Ratio)

Meaning: The Debt Coverage Ratio (more popularly known as Rental Coverage) is a metric that evaluates a property’s ability to cover its debt obligations (mortgage payments) with its rental income. It’s calculated by dividing the property’s monthly rental income by the mortgage payment. 

Importance: Rental coverage is important because it helps you assess the property’s financial health and its ability to generate sufficient income to cover its expenses. Most buy-to-let mortgage lenders have rental coverage criteria of between 125-150% that you must meet before being offered a mortgage.

GRM (Gross Rent Multiplier)

Meaning: The Gross Rent Multiplier is a metric used to quickly estimate the value of an income-producing property based on its rental income. It’s calculated by dividing the property’s price by its gross rental income. 

Importance: GRM is useful for comparing properties and assessing their potential value based on their rental income. However, it’s important to remember that GRM does not consider expenses or other financial factors.

Rough numbers for if you’re unsure

Closing costs – £2000 

Refurb costs – £6000 for a light refurb, £18,000 for a full refurbishment (prices for Northern property)

Managing agent fee – 10% of rent plus VAT

Landlord insurance – £30 for landlord’s building insurance

Maintenance – It’s suggested that you put away 10% of your rental income for property maintenance.

Occupancy rate – If you screen your tenants well, this should be 95%

Annual property appreciation – The UK average is around 3% but find your locations average using the UK House Price Index.

Annual rent appreciation – You should keep this in line with inflation by raising it by 3-5% per year.



The data and all content on this website is for informational purposes only and should not be relied upon. It does not constitute investment advice, or advice on tax or legal matters.  You alone have the responsibility of carrying out due diligence to evaluate the benefits and risks associated with any content on this website and seek the appropriate professional advice. You agree not to hold this website, its owner, author or any sponsor accountable for any possible losses as a consequence of any decision you made, based on the information you found on this website. No income claims are being made for any opportunity or method described — outcomes often depend on personal skills and work ethic alongside market conditions that are outside of any individual control. This website is not endorsed nor sponsored by any company or band mentioned therein.