How to Analyse a Buy-to-Let Deal in 10 Minutes

Speed Meets Strategy in Property Investment

Navigating the world of property investment can often feel overwhelming due to the sheer volume of information available — from countless listings to fluctuating interest rates and the pressure to act swiftly before someone else seizes the opportunity. However, making informed decisions doesn’t require spending hours poring over spreadsheets.

At Genius Academy, we have developed a straightforward 10-minute framework for evaluating buy-to-let (BTL) deals. This method is structured, repeatable, and it uses the same calculations that professional investors and brokers rely on daily.

The Importance of Quick Analysis

Successful investors are not necessarily those who discover the most deals; rather, they are the ones who can swiftly eliminate the less viable options.

Quick analysis allows you to:

• Respond to agents promptly (before competing offers come in).

• Concentrate solely on deals that align with your financial criteria.

• Steer clear of decisions driven by emotion or speculation.

By inputting just a few key figures—such as purchase price, expected rent, and essential costs—you can quickly determine whether a deal warrants further investigation or should be discarded.

Step 1: Collect Key Information

Before diving into calculations, gather these five essential figures:

1. Purchase price— the amount you will pay for the property.

2. Expected Monthly Rent – a realistic estimate of market rent, not merely the agent's claim.

3. Deposit & Loan Amount – the amount you are borrowing compared to your investment.

4. Monthly Mortgage payment— an estimate based on the interest rate and loan term.

5. Running costs encompass insurance, letting fees, maintenance, and allowances for void periods.

These figures are all you need for an initial analysis.

Step 2: Calculate Your Gross Yield

Gross yield provides a quick snapshot of rental returns in relation to the purchase price.

Formula: (Annual Rent ÷ Purchase Price) × 100

Example: Rent = £1,000 per month (£12,000 annually) Price = £180,000

Gross Yield = (12,000 ÷ 180,000) × 100 = 6.7%

This yield serves as your baseline. Generally, yields below 5% may struggle to generate positive cash flow once expenses are factored in, depending on your mortgage rate.

Step 3: Estimate Your Net Income

Next, subtract annual running costs and mortgage payments from your rental income:

• Rent: £12,000

• Costs (insurance, management, maintenance): £2,000

• Mortgage payments: £7,000

This results in a net income of £3,000 per year.

To calculate your return on investment (ROI), divide this net income by your total cash invested (deposit plus fees).

Example: If your cash invested = £50,000,

ROI = (3,000 ÷ 50,000) × 100 = 6%

Step 4: Conduct a Stress Test

Now, it’s time to stress-test the deal. Consider the following questions:

• What if rent decreases by 10%?

• What if interest rates increase by 1–2%?

• Will I still be able to cover the mortgage and other costs?

Utilise our Profitability Calculator to automatically evaluate various rent and rate scenarios, saving you time and helping you avoid unexpected pitfalls.

Step 5: Make a Swift Decision

After analysing the numbers, make a decision:

• ✅ Move forward with deeper due diligence if the ROI and yield align with your goals.

• ⚙️ Re-negotiate or hold off if the deal is marginal but could be viable at a lower price.

• ❌ Reject outright if the yield or ROI is insufficient, even before considering costs.

The objective is not to find the perfect property but to avoid wasting time on subpar options.

Step 6: Document and Review Each Deal

Maintain a log for every property you analyse, including those you choose to reject. This practice will enhance your understanding of the local market over time and reveal clear trends in yield, rental rates, and ROI.

Professional investors approach deal analysis like a workout routine—the more you practice, the sharper your instincts will become.

Prioritize Data Over Emotion

The quickest path to success in property investment is to base your decisions on data rather than emotions.

Every investor, from novices to seasoned portfolio owners, should be capable of conducting a deal analysis confidently in under ten minutes.

By adhering to a structured process, you will find that clarity replaces uncertainty. This is the foundation of intelligent investing.