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In This Guide
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
In our rental yield guide we showed how a Thurrock property delivering just 2.1% net yield could generate a 7.3% return on investment. But how does that happen? And why should serious UK investors care more about returns on capital employed than headline yields?
The answer is leverage. Once you grasp how return on capital employed (ROCE) works, you’ll look at buy-to-let returns in a completely different way. This guide explains how UK property investment returns are calculated, why leveraged purchases produce very different outcomes, and when to use a return-on-investment approach over traditional yield metrics.
• Leverage can turn low net yields into 7–9%+ ROCE
• ROCE measures returns on your capital, not the property’s price
• Different areas deliver different return profiles: income, growth or balance
• Company structures and tax strategy can lift overall returns
• Refinancing and equity release can dramatically improve long-term ROI
• Our ROI calculator helps you model accurate, real-world returns
UK property returns can look modest on the surface, but the numbers change dramatically once leverage is factored in. Instead of measuring performance based on the property’s full value, ROCE reveals what your actual invested capital is earning — often turning seemingly low-yield properties into high-performing investments.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Metric
Metric
Yield Perspective
ROI Perspective
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
That’s leverage in action.
Metric
Metric
Yield Perspective
ROI Perspective
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
That’s leverage in action.
Metric
Metric
Yield Perspective
ROI Perspective
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
That’s leverage in action.
Return on capital employed (ROCE) measures your actual profit as a percentage of the cash you put into the deal - not the full property value.
While rental yield tells you what the property returns, ROCE tells you what your money returns.
ROCE formula:
ROCE = (Annual profit ÷ Cash invested) × 100
The key difference is leverage. If you buy a £280,000 property with a £70,000 deposit, your calculation is based on the £70,000 (plus buying costs), not the full £280,000 purchase price.
This is why experienced investors assess property performance using ROCE rather than relying on headline yields.
Rental yield vs return on investment: the key difference
Rental yield shows the return based on the property’s value.
Return on investment (ROI) shows the return based on your money invested.
To see why this matters, let’s revisit our Thurrock example:
Metric
Metric
Yield Perspective
ROI Perspective
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
Let’s compare two investors, each with £300,000 to invest, to see how leverage affects returns.
See how past property investments delivered strong returns, from rental income to capital growth, these real examples showcase strategies that work.
Continue your property investment journey with these expert guides - practical strategies and insights to help you make smarter investment decisions.
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