Calculate property ROI
Enter the purchase price, buying costs and estimated annual profit after all running costs to calculate your projected return on capital invested.
What this calculator does
This free property ROI calculator estimates the annual return on investment (ROI) for a UK property, measured as a percentage of the total cash you invest — including the deposit, buying costs, and any refurbishment spend. Unlike rental yield (which measures rent against property value), ROI measures profit against the actual capital you deploy.
For leveraged investors using a mortgage, cash-on-cash ROI is a more useful metric than yield alone, because it reflects the actual return on your own money rather than on the full asset value.
How property ROI is calculated
Annual profit = Gross annual rent − all running costs (agent fees, insurance, maintenance, void allowance, ground rent/service charge) − annual mortgage interest payments (if applicable).
Total cash invested for a leveraged purchase = deposit + stamp duty + solicitor/conveyancing fees + survey costs + mortgage arrangement fees (if paid upfront) + refurbishment and furnishing costs.
For an unlevered (cash) purchase, total investment equals the purchase price plus all buying costs.
Note that this calculator measures rental ROI only. Total property returns also include capital appreciation, which is not reflected here. In areas with strong capital growth and lower yields, total returns may be strong even if rental ROI appears modest.
Example calculation
A £200,000 buy-to-let property purchased with a 25% deposit:
Total cash invested
Deposit (25%): £50,000
Stamp duty (additional property rates): £11,500
Solicitor fees: £2,000
Survey + misc: £1,000
Total: £64,500
Annual profit
Gross rent (£950/month): £11,400
Running costs: −£3,200
Mortgage interest: −£4,125
Net profit: ~£4,075
ROI = £4,075 ÷ £64,500 × 100 = 6.3%
On a gross yield of 5.7% — leverage improves ROI by increasing the denominator efficiency
When to use this calculator
- Comparing leveraged vs unleveraged returns — see how a mortgage amplifies (or reduces) your return on capital compared with buying outright.
- Assessing whether a deal meets your return threshold — if you require 8%+ ROI and a deal delivers 5%, you can quickly see what needs to change (purchase price, rent, or costs).
- Comparing different investment options — benchmark property ROI against other investment returns (ISAs, shares) on a like-for-like basis.
- Modelling the impact of different deposit sizes — see how investing 25% vs 40% deposit changes the cash-on-cash ROI.
Common mistakes
Using purchase price as the denominator instead of cash invested
ROI should be measured against the cash you actually deploy — deposit plus buying costs — not the full purchase price. Using the purchase price gives the same result as gross yield and understates the return that leverage creates on your actual capital.
Forgetting buying costs in the denominator
Stamp duty, solicitor fees, survey costs and any refurbishment are part of your total investment. Omitting them overstates ROI. A £7,500 SDLT bill and £3,000 in fees on a £60,500 deposit calculation matters significantly at the margins.
Not including mortgage interest in annual profit
For leveraged investments, mortgage interest is the largest running cost. Including it in the annual profit calculation gives a realistic picture of cash-on-cash returns. Omitting it inflates the apparent profitability of leveraged purchases.
Treating ROI as a complete measure of investment quality
ROI measures rental income performance only. Capital growth, void risk, management burden, maintenance intensity, and local market dynamics all affect the quality of an investment in ways that ROI does not capture.
Frequently asked questions
What is the difference between rental yield and property ROI?
Rental yield is annual rent divided by property value — it measures income relative to asset price. Property ROI is annual profit divided by cash invested — it measures the return on your actual capital outlay. For leveraged investors, ROI is the more relevant figure.
What costs should I include in total investment?
Include deposit, Stamp Duty Land Tax (plus the 5% BTL surcharge), solicitor and conveyancing fees, survey costs, mortgage arrangement fees paid upfront, and any refurbishment or furnishing spend before letting. The more complete the denominator, the more accurate the ROI.
Does property ROI include capital growth?
No — this calculator measures rental ROI only. Capital appreciation can form a significant part of total property returns, especially in high-growth areas. Total return = rental ROI + annualised capital growth. In London and the South East, capital growth has historically dominated total returns despite lower rental yields.
What is a good ROI for a buy-to-let?
A cash-on-cash ROI of 6–12% is generally considered reasonable. Higher-yield cities with strong rental demand can exceed this. Lower-yield areas may offer lower rental ROI compensated by stronger capital growth. The benchmark also depends on mortgage rates — rising rates reduce net profit and therefore ROI.
How does leverage affect property ROI?
A mortgage amplifies ROI by reducing the cash deployed (the denominator). But it also introduces mortgage interest as a cost (reducing the numerator). At low mortgage rates, leverage significantly boosts ROI. At high rates, it may reduce it below what you would achieve with a cash purchase on a low-yield property.
Related calculators
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Gross yield with BTL-specific context
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Stamp Duty Second Home Calculator
SDLT including the 5% BTL surcharge
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ROI modelling for the BRRR strategy
Related guides
Is buy-to-let worth it in 2025?
Full analysis of UK BTL returns, costs and the Section 24 impact
Buy-to-let tax explained UK
Income tax, CGT, Section 24 and limited company considerations
Gross vs net rental yield explained
What each metric means and which to use for investment decisions
Best areas for property investment UK
Regional yield and capital growth analysis
Important information
This calculator is for general information and planning purposes only. ROI estimates are based on the inputs you provide and do not constitute investment, financial or tax advice. Actual returns will differ depending on costs, voids, tax position, mortgage rate changes and market conditions.
Property investment involves risk including the risk of capital loss, rental voids, unexpected maintenance costs, and changes to landlord legislation. The calculator does not account for capital growth, tax on income, or exit costs.
Consult a qualified financial adviser and a specialist landlord tax adviser before making any property investment decision. Read our full Disclaimer.
About the author
✓ Editorially reviewed — all Poqet guides are checked for factual accuracy before publication and updated when UK rates or legislation change. Editorial Policy