Deal Examples
The following are illustrative examples for educational and qualification purposes unless explicitly marked as real completed deals. They are based on stated assumptions and are not guarantees of future performance.
Every deal is presented with the same cost structure so you can compare like-for-like. Key terms used throughout:
| Void allowance | % of annual rent assumed as lost income to cover empty periods |
| Maintenance allowance | Annual provision for repairs and upkeep |
| Management costs | Letting and management fees as % of collected rent |
| Stress test | Interest rate increased to evaluate cashflow resilience |
| Yield on cash remaining | Net cashflow after finance divided by capital left in deal post-refinance |
| Purchase price | £120,000 |
| Refurb cost | £18,000 |
| Purchase, legal, stamp & broker costs | £7,500 |
| Total cash invested upfront | £145,500 |
| Refinance valuation after works | £170,000 |
| Refinance at 75% LTV | £127,500 |
| Deposit returned after refinance | £90,000 |
| Cash remaining in the deal | £55,500 |
| Equity position at refinance | £42,500 |
| Monthly rent | £1,150 |
| Annual gross rent | £13,800 |
| Void allowance (5%) | –£690 |
| Maintenance allowance (8%) | –£1,104 |
| Management (12% inc. VAT equivalent) | –£1,656 |
| Finance: £127,500 interest-only at 5.8% | –£7,395 |
| Net operating income before finance | £10,350 |
| Net cashflow after finance | £2,955/yr |
| Yield on cash remaining (£55,500) | 5.32% |
| Purchase price | £95,000 |
| Refurb cost | £10,000 |
| Purchase, legal, stamp & broker costs | £6,000 |
| Total cash invested upfront | £111,000 |
| Refinance valuation after stabilisation | £125,000 |
| Refinance at 75% LTV | £93,750 |
| Deposit returned after refinance | £66,000 |
| Cash remaining in the deal | £45,000 |
| Equity position at refinance | £31,250 |
| Monthly rent | £995 |
| Annual gross rent | £11,940 |
| Void allowance (6%) | –£716 |
| Maintenance allowance (10%) | –£1,194 |
| Management (12% inc. VAT equivalent) | –£1,433 |
| Finance: £93,750 interest-only at 6.1% | –£5,719 |
| Net operating income before finance | £8,597 |
| Net cashflow after finance | £2,878/yr |
| Yield on cash remaining (£45,000) | 6.40% |
| Metric | Deal 1 (BRRH) | Deal 2 (Buy & Hold) |
| Total cash in upfront | £145,500 | £111,000 |
| Cash remaining post-refinance | £55,500 | £45,000 |
| Net annual cashflow | £2,955 | £2,878 |
| Yield on cash remaining | 5.32% | 6.40% |
| Stressed yield | 2.11% | 3.48% |
| Equity at refinance | £42,500 | £31,250 |