Calculate gross and net rental yield for buy-to-let properties.
Enter the property value and rent
Use current market value (not purchase price) and realistic achievable monthly rent — check Rightmove and Zoopla for comparables.
Add letting agent and management fees
Letting agents charge 8-12% of rent, full management 12-15%. Tenant-find only is typically 1 month rent.
Include maintenance and voids
Budget around 1% of property value/year for maintenance and 2-4 weeks of void per year (4-8% of rent).
Add mortgage interest if applicable
Use the interest portion of repayments at the current BTL rate (~5-6% in 2025/26). For limited company SPVs, this is fully deductible.
Compare gross and net yield
Gross yield helps benchmark across postcodes. Net yield shows what you actually keep before tax.
Stress-test the ICR
Make sure rent covers 125-145% of mortgage interest at a 5.5-6% stress rate — the lender's minimum for a BTL mortgage.
Inheriting a property and renting it out rather than selling makes you a landlord for tax purposes overnight. How rental income tax, Capital Gains Tax base cost and mortgage rules apply in 2026/27.
Since the Furnished Holiday Lettings regime was abolished, long-term lets and holiday lets are taxed almost identically. What actually still differs between the two in 2026/27.
Fixing snagging defects on a newly built rental property raises a repairs-vs-improvement question for tax. How HMRC's capital vs revenue distinction applies to snagging costs in 2026/27.
Disclaimer: All results are estimates for guidance only and do not constitute financial, tax or legal advice. Always consult a qualified professional.
