Property investment calculator – calculate your ROI

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Calculators are important in order to predict the future after you buy a house. They are also useful to make sure there is a calculable return that is worth your while before you end up making the investment.

You should pay close attention to the amount you make back if you want to take investing seriously as there is little that can go wrong if you do all the due diligence you can and predict how cash flows in a property investment when calculating how to buy a property

property investment calculator

What are the two ways you can make an ROI on property?

In the UK, there are two main ways that you can invest in property and make a return on your money. The first is by having a positive rental yield and the second is by cashing in on the price of an increase in value of a home as you sell.

If you are relying on selling the property to make a profit with capital appreciation, you will have to take into consideration that this cannot be done until you sell the property. So ideally, you will want to have a positive rental yield and also a positive capital appreciation, allowing you to benefit from both.

This will allow you to make money while you own the property as rental income and also on the sale of the property too.

Why is it even important to calculate rental yield?

Calculating rental yield is vital for property investors and landlords as it provides key insights into how well an asset will perform. Especially if you are taking out a mortgage on the property.

If you don’t calculate rental yield correctly and invest in a property without a positive rental yield, you may end up paying too much. 

By comparing rental income to property costs, investors can assess the investment’s viability and compare different opportunities throughout the UK. At the moment, there is a 4.75% rental yield on average for the UK for 2023 so you can see for yourself how your property compares.

Why is it important to calculate capital growth?

Calculating capital growth is of paramount importance in the context of property investments. For property buyers and investors, understanding the rate at which property values appreciate or depreciate over time is crucial in evaluating the performance of their real estate holdings.

It allows them to gauge the success of their property investment strategies and make informed decisions about buying, selling, or holding onto properties. Capital growth figures offer valuable insights into the potential for wealth accumulation through real estate investments and help individuals plan for long-term financial goals, such as retirement or funding major expenses. 

Additionally, tracking the capital growth trends in the property market enables investors to identify emerging opportunities and adapt their investment strategies accordingly. Moreover, it aids in assessing the level of risk associated with specific properties or locations, guiding investors in diversifying their property portfolios effectively. 


How to calculate the return on property investment using a calculator step by step

In order to calculate a return, you will need know some basic information about the property. First of all, you should take a note of the monthly rent, the amount you are paying for a mortgage and also the property purchase cost.

Input the key assumptions

The inputs for the calculator includes the things like the purchase price of the property, the renovation costs and the stamp duty costs. You may need to find an additional Stamp Duty calculator in order to input this accurately. Also, bear in mind that these rates differ on buy to let mortgages.

Other outputs include the management fees and monthly rents of a property.

Understand the output

On this calculator, the outputs show the capital flow and the profit and loss of the property in terms of rental income. The capital flow amount is broken down into the equity in the deal and the profit and loss is represented as a pre tax net rent.

Who is able to use the rental yield calculator?

Anyone who is living in the UK and wants to calculate their rental yield is able to use this calculator. Simply input your details and make sure they are as accurate as possible.

Sometimes, you will not be able to input the details very accurately if you haven’t spoken to a mortgage advisor or you aren’t sure about the extent of your deal yet. This is why it’s important to find the most accurate information if you are predicting the inputs for the calculator and better yet only input real life examples of property.

To try it out, click below to try it out yourself:


What is a good ROI on a property?

A good return on investment on rental income is 5% - 7%. Capital appreciation varies a lot more depending on the type of property and its location

What is a good return on investment over five years?

Usually, a five year period is a better length of time to base a property investment over as most buy to let mortgage fixed rates are over within this time. From here, a proeprty can be remortgaged and a good return could be around 30

Can an ROI be more than 100% on a property?

Yes, Return on investment can exceed 100% if there was very little cash in the deal and you perhaps refinance the property to produce more than double what you originally had in the deal

Is ROI based on profit or revenue?

Return on Investment is always based on profit

Are there any common mistakes to avoid when calculating ROI?

The most common mistake to avoid when calculating ROI is using revenue instead of the profit on a property

Is ROI and profit the same thing?

ROI and profit are the same thing but they are used in different contexts. If you want a percentage figure of the amount of money you have made back in relation to what you have put in, ROI is the right metric. However, if you are after a monetary figure without knowing how much you had to invest to get this amount, then use the figure for profit.

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Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.


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