This site uses web cookies · Read our Policy here
International: (+34) 952 198 657

How to Calculate the Return of Your Buy to Let Investment

First name: 

 

Last name: 

 

Tel. Number: 

IPIN Disclaimer.

  We never share your data with any third parties.

*Note: IPIN investment opportunities are available subject
to location and certain knowledge / experience criteria.

"I have found this investment good and worthwhile as it gives good return and also pays monthly which is very good in these days of inflation and financial turbulence "


Mr K S
IPIN Member & Development Funding Investor

I first got to know IPIN Global at a seminar they conducted in their office. Then I met them for a deeper understanding of how they work on a separate meeting. Truly, I was impressed by their investment structure they have put in place to protect the investors FIRST. This in my opinion is an Investor-First company. I have no questions to refer IPINglobal to any individual who are looking for a safe and secure investment opportunity. Keep it up, IPIN Global.


Victor Ang
IPIN Member and seminar attendee

IPIN Global provide the best service we have come across so far with regards to property investment. So far the risk/rewards is very good and the payments are all on time.


Mr Teo
IPIN Member and investor

I am very happy, this is the first investment with IPIN and I hope to invest more soon.


Mr Vinay Chugh
IPIN Member and investor

I have invested in the Newman Residential opportunity through IPIN. I can see the interest being accrued in my IPIN Portfolio on my web account; although I have yet to receive the payout which based on my choice will be upon the maturity of the tenure. The relationship managers and sales personnel at IPIN are all friendly and more importantly knowledgeable about the products, and are happy to have a no-obligation chat with you as a potential investor. At no point did I feel pressured to sign on the dotted line, and all questions were duly answered in a prompt fashion.


Mr Samtaney
IPIN Member and investor

It is a pleasure working with great professionals like Mark Wilson & team. The investment process was extremely easy and the opportunity itself great!


Mr K
IPIN Member and investor

I entered IPIN Newman project this year. I have to say IPIN staff have been very helpful and professional, furthermore the process fast and clear. All terms of the agreement have been punctually respected. I would say it is the kind of investment I was looking for and I thank IPIN for it.


Mr Zannetti
IPIN Member and investor

From my own experience IPIN Global seems to be a well-run organization with capable staff. When appointments have been made to make contact this scheduling was adhered to and the staff were informative and polite throughout. I have already recommended IPIN to associates of mine and look forward to the Company's future projects!


Mr Goldblatt
IPIN Member and investor

I found IPIN staff very responsive and helpful, answering all my questions promptly and thoroughly. They were not at all pushy and that created a trusting atmosphere. I am delighted to say that I recently have had my first exit. The returns were exactly as forecast and I am now looking to recycle the funds into the next project and looking forward to other exits.


Mr Masood
IPIN Member and investor

This was my first termination of an IPIN investment and I was very pleased to see that everything worked exactly as planned. My money was returned exactly when promised. It was opportune to reinvest the funds in another IPIN project in London and I was happy to do so. Again, everything worked as planned - very professional, very helpful and no sales pressure.


Mr Oswell
IPIN Member and investor

This is an excellent investment opportunity with very interesting returns and the IPIN Team provides clear, transparent and comprehensive support during all stages of your investment...


Mr Roberto
IPIN Member and investor

I was confident in the investment and more than pleased by the attentive staff who had a open attitude to any concerns I had, they were never impatient with the level of queries I made, in all a good experience...I have rolled over in to another investment with IPIN Global.


Mr Miller
IPIN Member and investor

Despite having some reservations about the concept of the investment format as it was something new to us, we did invest in a few opportunities. The Brick Lane project has now matured early and our funds returned together with accrued interest repaid. We were therefore happy to re-invest those funds into the Urban Villa Aldgate development.


Mr L Gray
IPIN Member and investor

I met with the IPIN team at the property exhibition in London and since then we have developed a strong relationship. This has encouraged me to make two further investments with them and I am looking forward to working with them for many years.


Mr Curl
IPIN Member and investor

Over the 3 years of this project, it has been central in helping me change my financial horizon from damage-limitation following other failed projects through to a position of actually now having choices and options with regard to my financial future.


Mr Green
IPIN Member and investor

I decided to invest with IPIN Global following my own due diligence that included speaking with a couple of existing IPIN Global investors. I'm happy to report that all 3 units have terminated and in the case of one of these, I reinvested straight away into another investment.


Mr W
IPIN Member and investor

I invested with IPIN and everything went smooth and the funds were back in my account within the contracted time. ROI as prescribed and I can very much recommend IPIN's solutions as a part of ones portfolio.


Mr Halvardsson
IPIN Member and investor

I've been a member of IPIN for over two years and in that time I have always been impressed with their friendly professional behaviour. They have never pushed me, and have always dealt with any questions or problems swiftly and precisely. The products seem almost too good to be true, but as I have just exited my first application, I am now a believer!


Mr Trimby
IPIN Member and investor

After reading the IPIN advertisement I was wary but carried out due diligence before committing. My main concern was for the safety of my investment but this was covered by the legal process. Having now received the profits on my first sale I'm delighted with the financial outcome. Thank you IPIN!


Mr Field
IPIN Member and investor

I am almost embarrassed to discuss the 40% plus returns we have received, as people just cannot believe this is possible without there being a huge risk. With such confidence in the IPIN model, we are immediately re-investing a large proportion into another project. My wife has earmarked the excess for a shopping trip in the UK!


Bernard & Maureen
IPIN Members and investors

We looked at various property investments and monitored IPIN Global for some time prior to deciding to invest in the Raithwaite Cottages project. This proved to be an excellent investment with a 39% annualised return.


Mr & Mrs D
IPIN Members and investors

My first impression of IPIN was being struck by the courtesy and understanding of the IPIN staff. Something which I thought was reminiscent of a bygone era. IPIN were very professional in the management of my investment.


Waleed N.
IPIN Member and investor

When I first read about IPIN, I thought the returns were too good to be true, but they have proved me wrong, as, I invested and exited in just over a year and 9 months later with a whopping 48% return.


Andrew Nicol
IPIN Member and investor

People at IPIN are not pushy, they are friendly, patient, helpful and easy to reach during and after business hours, when it suits me best. This is what I expect from a consultant. I am planning to further expand my portfolio based on the results achieved by the IPIN team.


Mr. V.
IPIN Member and investor

As we approach retirement conservative and secure investment programs are the only ones we considered. The IPIN opportunities fit our investment goals perfectly and has performed as advertised. Who can argue with such annualised returns in the current economic environment?


John and Nancy Howell
IPIN Members and investors

There were two main aspects that attracted us to this investment; the strength of the commercial proposition itself (the product was eminently marketable) and the extensive security provided by the escrow and other associated legal arrangements.


Mr and Mrs S. Davies
IPIN Members and investors

After almost two years of working with IPIN, I am convinced this is one of the best wealth-building investment vehicles available.


Larry L
IPIN Member and investor

For me, IPIN's investments still represent the best thing I can do with my money - not only are they secure, but the returns are contractual too. Another thing I really like is how the projects to which IPIN apply their development funding always seem to be really sound - they're not just good investments, they always have a lot going for them as traditional investments.


Mr. M. Green
IPIN Member and investor

I invested with IPIN as an addition to my existing property portfolio. I was very surprised when told that I had been exited within just over 6 months.  I was extremely happy with the returns I made and decided to reinvest those returns with IPIN.


Mr Robert D
IPIN Member and investor

As the first of my investments with IPIN, I was keen to see an early result on one of my units even though I understood I should be prepared for the maximum 36 month term.  I was delighted when I received a call to tell me that the first of my units had exited in less than 3 months.


Mr J Donald
IPIN Member and investor

I invested with IPIN after some research. I have been kept informed of progress over the whole period until my unit was sold.  The strategy has worked extremely well for me and I elected to reinvest into another venture using the return plus the original investment.


Mrs. E. Davies
IPIN Member and investor

buy to let investment

Just like the most important statistic for a model may be the length of her legs, or the diameter of her waist, the most important measurement of a buy to let investment is its rental yield. This is the amount of money the property is capable of earning in rent each year, as a percentage of the property's purchase cost. But that is not what we are talking about here, calculating the total buy to let return on investment is a very different kettle of fish indeed.

Return on investment is a total for the length of an investment. Buy to let investments make money in the form of capital appreciation as well as rental income. On top of that we need to factor in rental increases over the period as well. Finally we need to factor in the costs; we need to measure the net rental income (after expenses) and add that to capital appreciation to work out the total return from a buy to let property investment. Buy to let rental payments are the main income flow, so we take the net income from this.

We have set up and exit costs, including things like stamp duties and capital gains taxes. We potentially have a mortgage to factor in, not to mention the fact that we need to predict house price growth in order to measure total return. Now you can see why most people only mention rental yield. Anyway, here are some examples that will hopefully teach you how to calculate the returns of buy to let investing. Thank fully many sites offering property investment advice offer a handy buy to let investment calculator.

Calculating the Returns for a 10 Year Buy to Let Investment

Costs:

The easiest way to do it is to take the purchasing costs and make them part of the price. So if we are buying a £200,000 property and the stamp-duty, mortgage arrangement fees, solicitors fees and other costs added up to £5,000 then the sum we would measure appreciation and rental yield based from would be £205,000.

Each property in the UK has running costs, electricity, water, council taxes but most landlords will hand these off to the tenants. This leaves us with our landlord-specific costs:

Property Maintenance:

The best way to do this is to sign up with a company like NPower Hometeam or an equivalent company for boiler maintenance. For this we will allocate £20 per month.

Letting Agency/Property Management:

Unless you plan to make managing your letting business a full time job then you will probably need to go down the route of property management. There are a range of options, some online letting agents charge a fixed monthly fee of as little as £45, but for full property management it is usually a percentage. The average is 10% but we were able to find one offering the service for 7%. We will however  allocate 10% to property management.

Insurance Premiums:

You will need buildings, and contents insurance, landlord insurance is also a good idea, this covers you for things like major plumbing work and things that can go wrong in a rental property. We will allocate £500 per year to cover insurance.

Furnishings

This is any initial outlay on furnishings and appliances, as well as replacements. We will allocate £5000 for initial furnishings, and £2000 every five years to cover the cost of replacement.

So the costs will work as this:

Purchasing Costs:

Property purchase price including costs: £205,000

Furniture: £5000

So we will measure the rental yield from £210,000 in year one, and £200,000 in subsequent years. Capital appreciation will be measured off £200k.

Monthly Costs:

  • Property Maintenance: £20
  • Property Management: £0 - 10% commission on rentals achieved.
  • Insurance: £41.66
  • Furniture: £33.33 (£2000 every 5 years is £400 per year)

Total: £196.55 rounded to £197.

Income:

Rental Rate: £850 pcm

Net Rental Yield:

To work out net rental yield we take the rental rate minus costs, multiply it by 12, then divide by the purchase cost, and multiply by 100 to turn it into a percentage.

Rental yield: £653 * 12 / £210,000 * 100 = 3.73% rental yield

Rental Income:

The current rate of inflation recommended to be added for investors is 4%, because we will be taking this off our average appreciation, we will add it to our rental income every year, and to the expenditure as a workable average as well.

Year One £850 - £197 = £653 * 12 = £7,836
Year Two £884 - £205 = £679 * 12 = £8,148
Year Three £919 - £213 = £706 * 12 = £8,472
Year Four £956 - £221 = £735 * 12 = £8,820
Year Five £994 - £230 = £764 * 12 = £9,168
Year Six £9,168 + 4% = £9535
Year Seven £9535 + 4% = £9916
Year Eight £9916 + 4% = £10,312
Year Nine £10,312 + 4% = £10,724
Year Ten £10,312 + 4% = £11,152

Total Net Rental Income (except management fee): £94,083

Total Net Rental Income (including 10% management fee): £84,674.70

Total Rental Income over Term: £84,674.70

Capital Appreciation:

According to the Halifax house prices in the UK have been rising at 10.3% per year for the last 40 years. So we will take 10% for a capital appreciation average over the term of our investment, and then take away 4% for inflation, leaving us with 6% average growth.

Year One:
6% of £200,000  = £12,000
Year Two:
6% of £212,000 = £12,720
Year Three:
6% of £224,720 = £13,483
Year Four:
6% of £238,203 = £14,292
Year Five:
6% of £252,495 = £15,150
Year Six:
6% of £267,645 = £16,059
Year Seven:
6% of £283,704 = £17,022
Year Eight:
6% of £300,726 = £18,044
Year Nine:
6% of £318,770 = £19,126
Year Ten:
6% of £337,896 = £20,274

Total Capital Return: £158,170

Total Return:

Capital Appreciation £229,230 Plus Rental Income(minus management fee) £84,674.70= £313,904.70

Total Return Minus Purchase Price £322,373 - £200,000 = £113,904.70

Total Return as a Percentage = £113,904.70 / £200,000 * 100 = 56.95%.


*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.