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How to Calculate the Rental Return on Your Buy-to-Let in Kent

How to Calculate the Rental Return on Your Buy-to-Let in Kent

A two-minute read to help you quickly determine
the return on a buy-to-let property in kent.

If you’re looking for
a property to rent out, it’s important to understand the numbers involved. You
may have inherited a property and are thinking of letting it. Use the
information here to identify if that is a prudent thing to do or if the capital
from selling the property could be better invested.

Find the numbers

The simplest way to
work out your gross return on a rental is to estimate some numbers. You can
have a browse on the property portals to get a vague sense of what properties
in your budget sell for and let for. These figures change across the country so
it’s important to start with your own research.

Quick and easy

Here’s a simple
calculation to get you the basic overview. Let’s use an example of a £150,000
property that rents out for £500 a month.

500 x 12 (months in a
year) = 6,000 p.a.

Divide 6,000 by the
purchase price of £150,000 = 4%.

For some investors, a
4% gross yield would be sufficient. Others look for higher but it’s all rather
area dependent. Here in mid kent, we normally suggest looking to
achieve 5%.

Deduct your deductions

We’ve worked out your
gross figures. But it’s the net figures that are the ‘money in your pocket’
numbers. To work these out, you’ll need to employ a little more guesswork.
Better still, ask a local property expert, like us, who deals with these things,
day in, day out. Then you’ll be closer to an accurate estimate. The figures you
need are:

costs (if you’re purchasing a property)


property maintenance


End of
tenancy cleaning costs

These can be off-set
against your income for tax purposes.

Taxes, taxes, taxes

It’s reasonably
straightforward to submit your tax returns yourself. They need to be done
annually and submitted by the following January. It’s recommended though to use
an accountant. They will be up to date with all the latest options open to you.
Not only that, they can often help in other areas, like looking at your pension
or investment options.

For rental
opportunities from South London to Mid Kent, get in touch with us on 01634304326. Our lettings
specialists can help you consider the market and the best options out there for