Published 15 May 2026 by Prop-Pocket Team
Learn how rental profitability analysis works, which costs matter most, and how landlords can track true property performance with confidence.
Why rental profitability is harder to measure than it looks
Every landlord knows their rent figure. Far fewer know their true net yield after all costs are accounted for. Rental profitability analysis closes that gap — and it often reveals surprises.
Gross yield vs net yield
Gross yield is simple: annual rent divided by property value. A £200,000 property generating £12,000 per year has a gross yield of 6%.
Net yield is what actually matters. It deducts mortgage interest, letting agent fees, insurance, maintenance, compliance costs, voids, and management time. That 6% gross yield might become 3.5% net — which changes the investment case entirely.
The costs that catch landlords out
Voids: Even one month's vacancy per year reduces effective annual income by 8.3%. Two months takes it to 16.7%. Factoring in realistic void assumptions changes the numbers dramatically.
Maintenance: Budget at least 1% of property value per year for maintenance and repairs. Older properties or HMOs will be higher. Unexpected boiler replacements, roof repairs, and kitchen refurbishments are when landlords most feel the lack of a financial buffer.