She Knew What the Rent Brought In.
What She Kept Surprised Her

Meet Susan

Susan is a pharmacist in Leicester with one rental flat, bought a few years back, and she has been thinking about buying a second. She is careful with money and knows her numbers, or thought she did. Before committing to another mortgage she asked for a PROXERA property review of the first flat, just to be sure it was really earning what she believed.

What the review found

Susan knew her rent, and she knew it worked out to about seven percent of what she paid for the flat. In her head, that seven percent was the return. The review showed how much smaller it got by the time the money actually reached her. The letting agent’s fee, insurance, the odd repair, a gap between tenants, and then the mortgage and tax all took a piece. By the time everything was paid, what Susan genuinely kept was closer to three percent. The seven percent was not wrong. It was just the top of the list, not the bottom.

What she did next

This mattered because Susan’s plan to buy again was built on the seven percent. Run the second purchase on the real number instead, and the most she could sensibly pay, and the rent the deal needed, both looked different. She took the review’s figures to her accountant to check the tax side before doing anything. PROXERA did not tell her whether to buy, that is her call with her accountant, but now she is planning from the number she actually lives on.

What you can take from it

The headline figure sells the property. The number left after everything is the one that pays you. If all you know is what the rent comes to, you know your ceiling, not your floor. A thin margin is not always a problem, plenty of good properties run on one, but you have to be able to see it before you buy the next one. Working that out honestly, for every property, is what a property review is for.

Why this is actually good news

Finding out what you really keep sounds like bad news. In practice it is the most useful thing an investor can learn.

• A number you can see is a number you can improve. Nobody has ever fixed a figure they were not looking at.
• Small adjustments, real difference. Rent brought into line, a cost renegotiated, a rate reviewed. None of it is dramatic, and all of it lands in your pocket.
• Your best property might surprise you. The one with the modest headline yield is very often the one quietly doing the most for you.
• Clarity is the cheapest upgrade in property. It requires no deposit, no refurbishment and no risk.

The rent tells you what came in. Your net position tells you what it was all for.

Example scenario. Figures are illustrative and not advice. Speak to a qualified adviser, accountant or solicitor before acting.