How to calculate equity for landlords

Make Text Bigger

Landlords Calculator Input Page v3.2

  • Gross annual rent expressed as a percentage of property value.
  • LTV stands for "Loan to Value". It is your loan expressed as a percentage of the value of your property. This is also known as gearing. It's important to know this when you are looking at which mortgage products are best suited to your requirements.
  • Equity is the money you would get back if you were to sell your property after repaying your mortgage. You would probably have to pay an estate agent or an auctioneer and also a solicitor too so not all of this money would end up in your pocket if you were to sell.
  • (excluding mortgage interest)
  • If you decide to download a summary report of these calculations we will share ideas on reducing your costs.
  • After deducting all mortgage interest payments and costs your current return on equity or averaged monthly cashflow in £ is
  • This is your net annual cashflow expressed as a percentage of the equity you have in your property. This calculation is also referred to as; return on cash, cash on cash return, return on capital employed/invested, ROC and ROCI. NOTE - if you have zero or negative equity the this figure is not relevant.
  • Based on the figures you have entered the break even interest rate is ....
  • Only complete the sections below if you would like to download a full report for your own records which includes suggestions on how to increase your returns and protect your cashflow.
  • For your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • E.G. bank base rate plus 1.75% for the remaining term of the mortgage. NOTE - this field is for your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • For your own reference purposes only
  • For information regarding capital gains tax payable on sale, how it may be reduced and the importance of reporting the sale to HMRC whether you have made a profit or not please see the Tax section of this website

I built this wizard (calculator if you like) which calculates many of the things that newbie landlords ask questions about. I would like to think all landlords and their professional advisers will find this calculator useful.

It starts off with easier calculations such as LTV, equity and yields, either on purchase price or current value, and then gets ever more complex by calculating things like break even interest rates, cashflow net of all costs, cash on cash returns etc.

It doesn’t matter whether you are a seasoned pro or a complete newbie, I hope you will find it really informative and very easy to use.

After you have used the calculator I would be extremely grateful if you would be so kind as to post a review in the comments section below.

Thanks in advance for your comments and please say it as you see it, warts and all please as I will use all feedback I receive to make it even better 🙂

Regards

 

Mark Alexander – founder of Property118.com



Comments

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More