How to calculate returns on equity for landlords

Landlords Calculator v3.2

This calculator is FREE TO USE and all we ask is that you consider making a small donation towards the running costs of Property118, but this is NOT compulsory

• Property value*
• Monthly rent*
• Gross rental yield*
  Gross annual rent expressed as a percentage of property value.
• Loan/Mortgage amount outstanding*
• Based on the figures you have provided your LTV is ...*
  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.
• Your gross equity is £*
  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.
• What is the current interest rate you are paying?*
• Monthly interest only mortgage cost is £
• Maintenance Budget per annum
• Landlords Insurance cost per annum
• Annual re-letting budget
• Average number of void days per annum
• Annual cost of Voids
• Annual Ground Rent
• Annual Service Charges
• Cost of Gas Safety certificate
• Management fees as a % of rent
• Managment fees converted to monthly
• Annual costs converted to monthly
• Total monthly expenses budget
  (excluding mortgage interest)
• Expenses (excluding mortgage interest) as a % of rent monthly
  If you decide to download a summary report of these calculations we will share ideas on reducing your costs.
• Your monthly return on equity (cashflow) in £*
  After deducting all mortgage interest payments and costs your current return on equity or averaged monthly cashflow in £ is
• Your return on equity as a % 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.
• Break even (but not including tax)*
  Based on the figures you have entered the break even interest rate is ....
• Email*
  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.
• First line of property address
  For your own reference purposes only
• Property Postcode
  For your own reference purposes only
• Mortgage lender
  For your own reference purposes only
• Is this mortgage portable?
  For your own reference purposes only
  • YES
  • NO
• Interest rate structure
  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
• When does this mortgage need to be repaid?
  For your own reference purposes only
• Purchase price of this property
  For your own reference purposes only
• Capitalised purchased costs
  For your own reference purposes only
• Capitalised improvements to the property
  For your own reference purposes only
• Estimated costs of sale
  For your own reference purposes only
• If you were to sell this property at the value which you have stated your capital gain would be this amount*
  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