To analyse a UK property deal, you work through the same numbers in the same order every time: purchase price and buying costs, expected rent, running costs, refurbishment spend, and the end value or GDV. From those you calculate gross and net yield, return on investment, and how much cash stays tied up. A deal only stacks if the numbers survive conservative, evidenced inputs — not optimistic guesses.
By the Check Labs research team · Updated June 2026.
This guide is information, not financial or legal advice. Always verify figures independently and take professional advice before committing to a purchase.
Start with the four questions every deal must answer
Before any spreadsheet, a deal needs to answer four plain questions:
- What does it cost to get in? Purchase price plus all buying costs.
- What does it earn? Rent, or resale profit, or both.
- What does it cost to hold? Mortgage, management, voids, maintenance, insurance.
- What do you walk away with? Cash flow per month and return on the money you actually invested.
If you can answer those four with evidence rather than hope, you have a deal you can analyse. If you cannot, you have a guess. The free Deal Analyser is built around exactly this order so you do not skip a cost.
Step 1 — Nail down the true cost of acquisition
The purchase price is never the real cost. Add every buying cost on top:
- Stamp duty — see SDLT, and remember the additional-property surcharge applies to most investors. Scotland uses LBTT and Wales uses LTT, with different bands and rates.
- Legal fees and searches — typically a few hundred to over a thousand pounds depending on complexity.
- Survey — a Level 2 or Level 3 survey on an older or unmodernised property.
- Auction costs — if buying under the hammer, factor the buyer's premium and any administration fee into your maximum bid.
- Sourcing or finder's fee — if you are buying a packaged deal.
- Finance costs — arrangement fees, and interest on bridging or auction finance if you are not buying with cash.
Total acquisition cost is the figure every return is measured against — not the headline price.
Step 2 — Establish realistic rent and gross yield
For a buy-to-let, the engine of the deal is rent. Use evidenced comparables: actual let listings for the same street, size and condition, not the most optimistic asking rent on a portal.
Gross yield is the simplest first filter:
Gross yield = (annual rent ÷ total property cost) × 100
So a property costing £150,000 all-in, let at £750 a month (£9,000 a year), shows a gross yield of 6%. Gross yield is useful for quick triage between areas, but it ignores costs — so never make a final decision on it.
Step 3 — Strip out running costs for net yield
Net yield is where deals get honest. Deduct the real annual costs of holding the property:
- Letting and management fees (often a percentage of rent)
- Maintenance and a repairs reserve
- Insurance
- Void periods — budget for the property being empty part of the year
- Ground rent and service charges on leasehold
- Compliance: gas safety, electrical checks, and energy efficiency upgrades to meet MEES regulations
Net yield = (annual rent − annual running costs) ÷ total property cost × 100
A gross yield of 7% can fall to 4–5% net once costs are real. That gap is exactly where over-optimistic deals fall apart.
Step 4 — Model the refurbishment honestly
If the deal involves works — and most BMV and refurb deals do — your refurb budget is the line most likely to sink you. Break it into rooms and trades rather than a single round number, then add a contingency of at least 10–15% for the surprises older properties always hide.
For a BRR (buy, refurbish, refinance) strategy, the refurb has a second job: it must lift the property's value enough to pull most of your cash back out on refinance. That makes the end valuation the critical number.
Step 5 — Work out GDV and the end position
For any project where you add value, calculate the GDV — the gross development value, or what the finished property is realistically worth. Base it on sold comparables for finished, similar properties, not on what you hope a refurb will achieve.
The classic refurb sanity check:
Profit (or money left in) = GDV − purchase − buying costs − refurb − finance − selling/refinance costs
For a flip, that figure is your profit. For a BRR, it tells you how much cash stays trapped after refinance. A good BRR leaves little or none of your capital behind; a poor one quietly locks up tens of thousands.
Step 6 — Calculate ROI, not just profit
A big profit on a huge amount of cash can be a worse deal than a modest profit on very little. Return on investment ties the two together:
ROI = (annual return ÷ cash invested) × 100
Cash invested is your deposit plus all costs that were not borrowed. Compare the ROI to what the same money could do elsewhere, and to the effort and risk involved. This is the number that separates a deal worth doing from one that merely breaks even.
Step 7 — Stress-test before you commit
Good analysis assumes things go wrong. Re-run the deal with:
- Rent 10% lower than your comparable
- Refurb 15% over budget
- Two extra months of void
- Interest rates a couple of points higher
If the deal still works under that pressure, it is robust. If it only works on perfect inputs, it is fragile. You can run these scenarios quickly in the Deal Analyser, and pull the credible version straight into a Property Pack Maker presentation for an investor. For risk flags on a specific property — flood, planning, EPC and more — the Risk Report layers in the due-diligence side.
Common questions
What is a good yield on a UK rental property? It varies by region and strategy. Many investors look for a gross yield of around 6% or more, with northern cities often higher and the South lower. Net yield matters more than gross — always check the figure after real costs.
What is the difference between gross and net yield? Gross yield uses rent against price and ignores costs. Net yield deducts running costs — management, maintenance, voids, insurance — so it reflects what you actually keep. Net yield is always the truer number.
How do I work out GDV? GDV is the realistic finished value, based on sold prices for comparable, completed properties in the same area — not asking prices and not your own optimism. It anchors every refurb and BRR calculation.
How much should I budget for refurbishment contingency? A contingency of at least 10–15% on top of your itemised refurb estimate is sensible, and more for older or unsurveyed properties. Hidden problems with damp, wiring and drainage are common and rarely cheap.
Should I include my own time as a cost? Yes, especially for hands-on projects. Even if you do not pay yourself, your time has value and the deal should still return enough to justify the effort against a passive alternative.
Analyse your next deal in minutes
The discipline is simple: same numbers, same order, conservative inputs, every time. Rather than rebuild a spreadsheet for each property, run your figures through the free Deal Analyser — it walks you through acquisition costs, yield, refurb, GDV and ROI, and flags where a deal is thin. When the numbers stack, turn them into an investor-ready document with the Property Pack Maker, and explore more strategy and compliance guidance in the Deal Sourcing hub. Analyse first, commit second — that order is what keeps deals profitable.