Yield, ROI, cash-on-cash, the 20% Rule, SDLT, CGT. Making the numbers second nature. The one spreadsheet that changed everything.
I want to tell you about the deal that nearly bankrupted me. It was 2011. I bought a 3-bed semi on "feel" — the house looked great, the area seemed right, the price felt fair. I didn't run the numbers properly. I estimated the refurb at £8,000 and it came in at £22,000. I used comparables from a different property type. And I completely forgot to account for the SDLT surcharge, which at the time cost me an extra £3,600 I hadn't budgeted for.
Total loss: £8,200 on what should have been a straightforward flip. Not because the market was bad or the property was wrong, but because I trusted my gut instead of a spreadsheet.
That was the last deal I ever did without running every number first. I built a spreadsheet that week — nothing fancy, just purchase price, SDLT, legal fees, refurb estimate with 15% contingency, holding costs, selling costs, and projected profit. If the spreadsheet doesn't say yes, I don't make an offer. Full stop.
This month is about that discipline. Every deal teardown below shows you the full number stack — not just the headline profit, but every cost line. The same analysis framework applies whether you're flipping, holding as BTL, converting to HMO, or sourcing for an investor. If you learn one thing from The Property Intel, let it be this: gut feeling is the most expensive strategy in property.
This is the Numbers Month, so let's look at the same property through two different lenses. As a standard BTL, this 5-bed rents at £750/month — a gross yield of 6.4% on the all-in cost. After mortgage (5.2%, 75% LTV), management, insurance, maintenance, and void allowance, the monthly cash flow is £47. That's less than a tank of petrol.
As a 5-room HMO, the same property rents at £475/room = £2,375/month — a gross yield of 15.9%. After the same costs (higher management fee at 12% for HMO, plus licensing at £1,100 spread over 5 years), the monthly cash flow is £612. That's the difference the numbers make. Same property. Same postcode. Different strategy. The additional refurb cost of £28,000 (fire doors, en-suite to largest room, shared kitchen upgrade, emergency lighting) pays for itself in 18 months through the increased rent.
HD1 has no Article 4 direction, so this conversion proceeds under permitted development. The university is 0.8 miles away. Professional and student demand for rooms is strong year-round.
David, your agent is quoting gross yield. You're calculating net yield. You're both right — but yours is the number that actually matters.
Gross yield is simple: annual rent ÷ purchase price × 100. If you buy for £100,000 and rent at £667/month (£8,000/year), that's 8%. This is the number agents use because it looks better. It ignores every cost you'll actually incur.
Net yield accounts for reality: mortgage interest, insurance, management fees, maintenance allowance (budget 10% of rent), void periods (budget 8% — roughly one month per year), landlord licensing, gas/electrical certs, and ground rent/service charges if leasehold. When you subtract all of that, the 8% gross typically becomes 4-6% net — or in your case, 5.2%.
Here's the rule I use: if the gross yield is below 7%, the deal probably doesn't cash flow after mortgage and costs. If it's above 9%, check why — there's usually a reason (bad area, problem tenants, structural issues, or the agent is inflating the rental estimate).
Deal Analyser Pro, CGT Calculator, Yield Calculator, SDLT Guide, Maths Cheat Sheet, and 92 more tools built from 25 years of running the numbers on real deals.