Cash flow testPASS
Rent leaves cash after costs, mortgage and estimated tax.
Your investment snapshot
Based on £178,500 upfront cash, including £150,000 equity, and a 7-year holding period.
POSITIVE CASH FLOW
Upfront cash£178,500Equity + purchase costs
Rent before costsGross yield6.6%Annual rent ÷ purchase price
Cash left each monthNet monthly cash£256After costs, mortgage & estimated tax
Year 1 return on your cashCash-on-cash return1.7%Rental cash left ÷ your upfront money
Average annual returnInternal rate of return (IRR)3.6%Includes estimated tax and the year 7 sale
What do these figures mean?
Upfront cashYour cash deposit/equity plus purchase tax, legal fees, initial works and other purchase costs.
Gross yieldAnnual rent before vacancy or costs, divided by the purchase price. It does not show what you keep.
Net monthly cashYear 1 rent left after vacancy, running costs, mortgage payments and estimated income tax.
Cash-on-cash returnYear 1 net cash flow divided by your upfront cash. A future sale does not affect this measure.
Total return / IRRThe annualised return on your own cash after rental cash flows, mortgage payments and net sale proceeds. It is a levered equity return when a mortgage is used.
Estimated CGTCapital Gains Tax on the estimated taxable property gain. It reduces sale proceeds but the outstanding mortgage does not reduce the taxable gain.
How this scenario performs
A structured reading of your assumptions—not personal investment advice.
Return testCAUTION
Compares the property with ten years of global-equity returns on the same pre-tax basis.
Resilience testCAUTION
Shows whether the conclusion survives a less favourable assumption.
The forecast stops at the selected exit year. If no sale is included, the property cash flow is modelled for 30 years.
Where the rent goes
Gross scheduled rent£19,800
Vacancy allowance−£990
Management & running costs−£3,681
Net operating income£15,129
Mortgage payments−£7,500
Estimated income tax−£4,552
Capital repaid£0
Annual cash in your pocket£3,077
Property P&L and cash flow
Costs show their share of collected rental revenue. Periodic repairs are charged in the year they fall due.
What else could the same cash have done?
Ten completed years, plus the latest market check
The chart compounds calendar-year total returns from 2016–2025, with income reinvested. The dated snapshot below shows what has happened since then. Your property line remains a separate forecast, shown before personal income tax and CGT.
2026 market snapshotOfficial data checked 18 September 2026 · not included in the ten-year CAGR above
Comparison basis: personal tax is excluded from every line. The property line still includes purchase costs, operating costs, mortgage payments and selling costs, but excludes estimated income tax and CGT. It is a leveraged equity return when a mortgage is used; the benchmark investments are unleveraged. Your main dashboard and P&L continue to include estimated property taxes.
Benchmarks: MSCI World GBP Net; iShares Core FTSE 100; iShares £ Corporate Bond; iShares UK Gilts; and the Bank of England Bank Rate history as a transparent cash proxy. Completed-year figures are retained for consistent ten-year CAGRs; the current-year snapshot is reviewed quarterly because the providers publish on different schedules and currencies. ETF figures are NAV total returns before personal tax and may differ after platform fees, dealing costs and currency movements. Bank Rate is not a savings-account return. Past performance is not a reliable indicator of future results.
Your exit assumption
£370,000 sale price implies 3.0% annual growth
Net sale proceeds deduct selling costs, estimated CGT and the remaining mortgage.
Average annual return (IRR)3.6%
Net sale proceeds£203,696
Estimated CGT£8,904
Mortgage remaining£150,000
Region reference3.5% p.a.
Growth difference−0.5% p.a.
Exit-value sensitivityA 10% lower sale price would reduce the estimated IRR from 3.6% to 1.6%.
Exit price −10%£333,000
Downside return1.6%
Return impact−2.0% pts
Important: this calculator is an illustrative educational tool, not financial, investment, mortgage, legal or tax advice. Results depend entirely on assumptions and may contain omissions or errors. The CGT estimate assumes one individual owner and simplified rules; it does not model joint or company ownership, capital losses or every relief. Section 24 is modelled using a basic-rate finance-cost credit, without every cap or carry-forward rule. To the fullest extent permitted by law, the site owner accepts no liability for decisions, losses or costs arising from use of these estimates. Verify all figures and obtain appropriate professional advice before acting. Read the full disclaimer.