Understanding Yields, ROI, and Cash Flow — Explained Simply
Property numbers don’t need to be complicated — but they do need to be understood.
Here’s a simple breakdown.
Yield
Yield shows how hard your money is working.
Example:
£12,000 annual rent ÷ £150,000 purchase = 8% yield
Useful for comparing deals — but not the whole picture.
ROI (Return on Investment)
ROI looks at the return on the actual cash invested.
This includes:
- Deposit
- Refurb
- Fees
- Stamp duty
ROI gives a more realistic view of performance.
Cash Flow
Cash flow is what’s left after:
- Mortgage
- Management
- Maintenance
- Costs
Positive cash flow = sustainable investing.
Final Thought
Yield attracts investors.
ROI builds portfolios.
Cash flow keeps them alive.
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