If you’re considering purchasing a Buy to Let Investment Property, it’s imperative you understand how to calculate Return on Investment or ROI.
See Also
What is the Rule of 72? And Why Rental Property Owners Need to KnowCouncil Post: How To Calculate The ROI On A Property Investmentproperty investors networkWhat is the gross profit marginPut simply the formula to work from is Annual Rent divided by Purchase Price multiplied by 100 = ROI %.
Generally, a 5-8% Return on Investment is desirable with most clients looking for a minimum of a 5% return.
| Return on investment | Rental pcm | £400.00 | £450.00 | £500.00 | £550.00 | £600.00 | £650.00 | £700.00 | £750.00 | £800.00 | £850.00 | £900.00 | £950.00 | £1000.00 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Purchase price | ||||||||||||||
| £80,000 | 6% | 6.8% | 7.5% | 8.3% | 9% | 9.8% | 10.5% | 11.3% | 12% | |||||
| £90,000 | 5.3% | 6% | 6.6% | 7.3% | 8% | 8.7% | 9.3% | 10% | 10.6% | 11.3% | ||||
| £100,000 | 4.8% | 5.4% | 6% | 6.6% | 7.2% | 7.8% | 8.4% | 9% | 9.6% | 10.2% | 10.8% | |||
| £110,000 | 4.4% | 4.9% | 5.4% | 6% | 6.5% | 7.1% | 7.6% | 8.2% | 8.7% | 9.3% | 9.8% | 10.4% | ||
| £120,000 | 4% | 4.5% | 5% | 5.5% | 6% | 6.5% | 7% | 7.5% | 8% | 8.5% | 9% | 9.5% | 10% | |
| £130,000 | 4.2% | 4.6% | 5.1% | 5.5% | 6% | 6.5% | 6.9% | 7.4% | 7.8% | 8.3% | 8.8% | 9.2% | ||
| £140,000 | 4.2% | 4.7% | 5.1% | 5.6% | 6% | 6.4% | 6.9% | 7.3% | 7.7% | 8.1% | 8.6% | |||
| £150,000 | 4.4% | 4.8% | 5.2% | 5.6% | 6% | 6.4% | 6.8% | 7.2% | 7.6% | 8% | ||||
| £160,000 | 4.5% | 4.9% | 5.3% | 5.6% | 6% | 6.4% | 6.8% | 7.1% | 7.5% | |||||
| £170,000 | 4.6% | 4.9% | 5.3% | 5.6% | 6% | 6.4% | 6.7% | 7.1% | ||||||
| £180,000 | 4.6% | 5% | 5.3% | 5.7% | 6% | 6.3% | 6.6% | |||||||
| £190,000 | 4.7% | 5.1% | 5.4% | 5.7% | 6% | 6.3% | ||||||||
| £200,00 | 4.8% | 5.1% | 5.4% | 5.7% | 6% |
See our Landlord Guides & Letting Service Options for full details on our Lettings Services available.
Alternatively, contact the office on 01302 867888 to speak to a member of our Lettings Team!
