Buy-to-Let Profit Calculator
This calculator cuts through the headline numbers to show whether a buy-to-let property is actually generating a monthly profit once all real costs are deducted. Mortgage payment, management fee, insurance, maintenance allowance, and other running costs are stacked against the monthly rent. The result is a clear monthly profit or loss figure — the number every landlord needs to know before completing a purchase.
Why this matters
Many landlords buy properties expecting significant monthly profits and discover after the first year that the numbers look very different once all costs are included. Modelling this in advance avoids painful surprises.
Key points
- Monthly profit = rent minus mortgage payment minus management fee minus insurance minus maintenance minus other costs
- A break-even property is not necessarily a bad investment if capital growth is strong
- Negative cash flow properties (where costs exceed rent) require personal funds to sustain each month
- Tax is not included in cash flow — set aside an additional portion for annual tax liability
- Management fees are typically expressed as a percentage of rent — not a fixed amount
- Review monthly profit at least annually as costs change, especially mortgage rates at renewal
Frequently asked questions
Is it acceptable to have a negative monthly cash flow on a buy-to-let?
Some landlords deliberately accept small negative cash flows on properties with strong capital growth prospects. However, negative cash flow properties require ongoing cash injection and carry higher risk. Many advisers suggest only accepting negative cash flow if growth prospects are compelling and you have sufficient reserves.
Why doesn't this calculator include tax?
Monthly cash flow calculations typically show pre-tax profit. Tax is calculated annually via Self Assessment and depends on your total income picture. Set aside approximately 20–40% of your rental profit for tax depending on your rate.
How does the management fee percentage work?
If you use a letting agent for full management, they typically charge 8–15% of the monthly rent as a fee. This is deducted from rent before being passed to you. For example, on £1,000/month rent with a 12% fee, you receive £880 and the agent retains £120.
What monthly cost am I most likely to underestimate?
Maintenance is the most commonly under-estimated cost. Many landlords budget nothing or a token amount for maintenance, then face large bills. Budget at least £100–£200/month for a typical property, rising for older or larger properties.