UK Tool
Buy-to-Let ROI Calculator
Model UK rental yield, net cash flow and total return. Includes Section 24 mortgage interest treatment, Council Tax, management fees, vacancy and income tax.
BTL typically requires 25%+
Verdict
Weak
Based on ROI & cash flow
Gross Yield
5.60%
Net Yield
2.66%
On property value
Cash-on-Cash
-10.93%
Return on deposit
Annual Cash Flow
-£8,198
Monthly Cash Flow
-£683
Total ROI
-4.42%
Cash flow + principal paydown
Monthly Mortgage
£1,251
Annual Income & Cost Breakdown
Income
Gross rent (12 months)£16,800
Less vacancy (5%)-£840
Effective rental income£15,960
Costs
Council Tax (Band D)£2,171
Landlord insurance£900
Management fees£1,915
Maintenance reserve£3,000
Mortgage payments£15,007
Income tax (40%, net of S24 credit)£1,165
Net annual cash flow-£8,198
Section 24 applied: Mortgage interest (£10,125) is not deductible from rental income — instead you receive a 20% tax credit (£2,025). This particularly hurts higher-rate taxpayers.
Long-Term Projection
Equity build-up and cash flow at 1, 5, 10 and 20 years.
| Year | Property Value | Annual Rent | Cash Flow | Cumulative Equity |
|---|---|---|---|---|
| Year 1 | £312,000 | £17,304 | -£8,198 | £92,615 |
| Year 5 | £364,996 | £19,476 | -£9,227 | £168,070 |
| Year 10 | £444,073 | £22,578 | -£10,697 | £275,222 |
| Year 20 | £657,337 | £30,343 | -£14,376 | £544,634 |
UK BTL Tax Notes
Section 24 removed the ability to deduct mortgage interest from rental income for individual landlords. Instead, a 20% basic-rate tax credit is applied. Higher and additional-rate taxpayers feel this most. Consider whether a limited company (SPV) structure may be more tax-efficient at scale.