Landlord

Rent to Rent Profit Calculator

Calculate profit margins for rent-to-rent deals. Analyze lease agreements, rental income, operating costs, and setup costs to determine your profitability.

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Free to use

Lease Agreement

£Monthly Rent to Landlord

What you pay the property owner

Lease Lengthyears

Contract duration (3-5 years typical)

£Deposit to Landlord

Security deposit required

Rent-Free Monthsmonths

Initial rent-free period

Rental Income

Number of Rooms

Lettable rooms

£Average Rent Per Room

Monthly rent per room

Occupancy Rate%

Expected occupancy

Monthly Operating Costs

£Utilities & Bills

Gas, electric, water, council tax

£WiFi & TV Licence

Internet and TV costs

£Cleaning & Maintenance

Regular cleaning & small repairs

£Insurance

Contents & liability insurance

£Management Fee

If using R2R management

£Other Costs

Miscellaneous expenses

One-Time Setup Costs

£Furniture Package

Beds, wardrobes, desks etc.

£Decor & Refurb

Paint, flooring, fixtures

£Legal Fees

Contract review, company setup

£Other Setup Costs

Keys, listing fees, photos

Key Risk Factors

Break-Even Occupancy

0.0%

Occupancy needed to cover all costs

Payback Period

N/A

Time to recoup setup investment

R2R Risks: Void periods, tenant damage, landlord relationship, utility costs exceeding budget, lease termination.

Monthly Summary

Gross Income

£0

4 rooms × £650

Effective Income

£0

At 95% occupancy

Rent to Landlord

-£1,200

Operating Costs

-£0

Monthly Profit

£0

Per Room Cashflow

£0

Monthly profit per room

Returns

Annual Profit

£0

Profit Over Lease

£0

Over 3 years

Profit Margin

0.0%

ROI on Setup

0.0%

Annual return on setup costs

Investment Required

Total Setup Costs

£0

Including deposit

Total Lease Value

£0

Rent payments + deposit

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About the Rent to Rent Profit Calculator

What it does and how it helps you

The Rent to Rent (R2R) Profit Calculator helps UK property investors analyse rent-to-rent deals by calculating monthly profit, annual returns, payback periods, and break-even occupancy. Input your lease costs, room rents, and operating expenses to see if your R2R deal is profitable.

Calculate monthly and annual R2R profit

Determine break-even occupancy rate

Calculate payback period on setup costs

Model profit over entire lease duration including rent-free periods

How It Works

Understanding the calculation method

Rent-to-Rent is a property business model where you lease a property from a landlord, then sublease it (usually by room) at higher total rent: **Monthly Profit**: (Total Room Rents × Occupancy Rate) - Rent to Landlord - Operating Costs **Operating Costs** include: utilities (gas, electric, water, council tax), WiFi/TV, cleaning, maintenance, insurance, and management fees. **Setup Costs**: Furniture packages, decoration/refurb, legal fees, deposits. These are one-off costs with a payback period. **Break-Even Occupancy**: The minimum occupancy rate needed for the deal to cover all costs without making a loss. The calculator shows monthly profit, annual returns, profit margin, ROI on setup costs, payback period, and profit over the entire lease term.

When to use this calculator

Use this calculator when evaluating R2R opportunities, negotiating lease agreements with landlords, or stress-testing your R2R business model. It's essential for understanding profitability, required occupancy rates, and how long until you recoup setup investments.

Frequently Asked Questions

Common questions about this calculator

Rent-to-Rent is a property strategy where you lease a property from a landlord on a medium-term contract (typically 3-5 years), then sublet it—usually as an HMO letting individual rooms—at higher total rent. You profit from the difference between what you pay the landlord and what you receive from tenants, minus operating costs. R2R requires landlord permission and proper legal agreements.

Yes, R2R is legal in the UK provided you have the landlord's written permission to sublet (essential!) and comply with all relevant regulations. If running as an HMO, you'll need HMO licensing, gas/electrical safety certificates, and fire safety compliance. Never do R2R without explicit landlord consent—it breaches your tenancy and can lead to eviction and legal action.

Aim for 30-40%+ profit margins in R2R deals. Lower margins leave little buffer for voids, repairs, or rising costs. A £1,200/month rent to landlord with £2,500 gross income from rooms gives £1,300 before operating costs—after £500-600 costs, you'd have £700-800 profit (roughly 30% margin). Factor in realistic voids and maintenance.

Key R2R risks include: void periods (empty rooms), tenant damage, utility costs exceeding budget, landlord relationship breakdown or termination, regulatory changes (e.g., stricter HMO licensing), and liability for the full rent regardless of occupancy. You're contractually obligated to pay the landlord even if rooms are empty. Always have 3-6 months reserves.

Budget £2,000-5,000+ per property for R2R setup: furniture packages (£1,500-3,000), decoration/refurb (£1,000-3,000), legal fees (£300-800), inventory/photography (£200-500), plus 1-2 months deposit to landlord. Budget more for larger properties or full refurbishments. Factor in these costs when calculating payback period and ROI.

Related Property Terms

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