A buy to let calculator, as an investor uses one before an offer, takes the asking price, the deposit, the finance cost, the rent, the void weeks, the letting and management costs, the maintenance allowance and the purchase costs, and gives back the cash the property leaves each month after everything is paid, the cash it takes to buy, and what the deal returns on that cash. A btl calculator is only as good as the rent it is fed, and most are fed the agent's figure, which is why the rent comparables sheet on this site exists: it works the rent from the lets in the street so the appraisal starts from a number that was checked. This page sets out what the appraisal takes in, what each figure does to the answer, and what the deal file keeps once the offer goes in.
The inputs, and which of them the investor actually controls
The asking price is the vendor's; the rent is the street's, worked from comps; the finance cost is the lender's; the void, the letting fee, the management fee and the maintenance allowance are the investor's own assumptions, and they are where most appraisals lie. A buy to let calculator uk investors use will let every one of them be typed in, and the honest way to use it is to fix the ones that are somebody else's figure and argue only about the ones that are yours. The one figure to check hardest is the rent, because a hundred pounds a month of optimism there is the whole margin on a small deal.
The outputs: monthly cash, cash in, and the return on it
The appraisal gives back three things. The cash the property leaves each month after finance, letting, management, maintenance and the void allowance, which is what the investor lives on or reinvests. The cash it takes to buy: the deposit, the purchase costs, the refurbishment and the reserve. And the return of the first on the second, which is the figure two deals are compared on. A deal can show a healthy gross figure and leave nothing after finance and a void, which is why the appraisal is run on cash after everything and not on a headline.
Where the rent comes from, and why the deal file keeps it
An appraisal is an argument about the rent, and an investor who cannot say where the rent came from has no argument. The rent comparables sheet works it from three lets in the street per square foot and shows the range; Yieldzo Pro keeps the comps, the appraisal and the offer against the property, so when the house comes back on the market in June the appraisal is re-run from the comps rather than from memory. The yield on the property once bought is a different sum, the landlord's, and rentrolldesk.com works it.
Questions people ask about buy to let calculator
Is a btl calculator the same as a rental yield calculator?
No. The yield calculator works the rent as a share of the price on a property, gross or net, and is the landlord's figure once the deal is done. The buy to let calculator is the appraisal before the offer: cash left each month after finance and costs, cash in, and the return on it.
What void allowance should a buy to let calculator use?
The one the street supports. Ask the letting agents how long the last three lets in the road stood empty between tenancies and use that, in weeks a year, rather than a national figure. A calculator with a void of zero is a calculator that has never met a tenant moving out.
Should the purchase costs go in the appraisal?
Yes, all of them: stamp duty at the additional-property rate, legal fees, the survey, the refurbishment and a reserve. They are the cash in, and a deal that returns well on the deposit alone returns worse on the real cash it took to buy.