This is a cash-flow estimate before tax, not a guaranteed return or financial advice. It assumes the rent, costs and mortgage rate entered stay constant. It excludes property value changes, selling costs and equity built through capital repayments.
How buy-to-let ROI is calculated
This calculator measures cash-on-cash return: the money left after annual outgoings, expressed as a percentage of the cash you put into the purchase.
ROI = annual cash flow ÷ upfront cash invested × 100
Your upfront investment is the deposit plus buying costs and initial refurbishment. Annual cash flow is collected rent minus management fees, other running costs and all mortgage payments. Vacant periods reduce annual rent by the number of vacant weeks divided by 52.
For example, investing £60,000 and receiving £4,800 a year after these outgoings gives an 8% cash-on-cash return before tax.
ROI, rental yield and mortgage costs
Gross rental yield compares a full year's rent before costs and vacant periods with the property's purchase price. ROI here compares the cash left after outgoings with your upfront cash investment.
A buy-to-let mortgage calculator focuses on your borrowing costs. Our rental yield calculator lets you explore yields separately.
Frequently asked questions
How are repayment mortgages treated?
The entire monthly payment, including capital and interest, is deducted from cash flow. Capital repayments reduce your mortgage balance but are not added back to this cash return. This is not a total investment return calculation.
Can I calculate ROI without a mortgage?
Yes. Enter the full property price as your cash deposit. Mortgage payments will be zero, and your investment will include the purchase price, buying costs and refurbishment.
What does a negative ROI mean?
With the figures entered, the property's rental income does not cover its mortgage payments and running costs. You would need to fund the shortfall.
Does the result include tax or house price growth?
No. The result excludes income or corporation tax, capital gains tax, changes in property value and sale proceeds. Buying taxes are included only through the total buying costs you enter.