Property investment glossary

Definitions of common UK property investment terms used in Deedty AI property management and across the buy-to-let industry.

Gross yield: Annual rental income divided by the property purchase price, expressed as a percentage. Gross yield does not account for running costs, voids, or mortgage payments. It is the simplest measure for comparing rental properties at a glance.
Net yield: Annual rental income minus operating expenses (maintenance, management fees, insurance, ground rent, etc.) divided by the purchase price. Net yield gives a more realistic picture of return than gross yield because it factors in ongoing costs.
Cash-on-cash return: Annual pre-tax cash flow divided by the total cash you invested (deposit, stamp duty, legal fees, refurbishment). Cash-on-cash return focuses on the money you actually put in, making it especially useful for leveraged (mortgaged) purchases.
Return on investment (ROI): Total gain from the investment — including rental profit and capital appreciation — divided by total cost, expressed as a percentage. ROI can be annualised to compare deals of different holding periods.
BRRR: Buy, Refurbish, Refinance, Rent. A strategy where you purchase a below-market-value property, refurbish it to increase its value, refinance onto a standard buy-to-let mortgage (pulling out your initial capital), and then rent it out. The Deedty AI property management calculator models each stage so you can see equity released, revised yields, and adjusted returns.
Buy to let (BTL): Purchasing a residential property specifically to rent it to tenants rather than to live in. BTL mortgages have different criteria from residential mortgages, typically requiring a larger deposit and assessed on expected rental income.
Stamp duty (SDLT): Stamp Duty Land Tax, a tax payable when you purchase property in England or Northern Ireland above certain thresholds. Additional properties (including most BTL) attract a surcharge. Scotland and Wales have their own equivalents (LBTT and LTT respectively).
Void period: A period when a rental property is unoccupied between tenancies. Void periods reduce annual income and should be factored into yield and ROI calculations. The Deedty AI property management portfolio tracker records void periods per property.
EPC (Energy Performance Certificate): A certificate rating a property's energy efficiency from A (most efficient) to G (least efficient). Landlords in England and Wales must have a valid EPC before letting a property, with a current minimum rating of E. Deedty AI property managementpulls EPC data from the government's Open Data Communities register.
EICR (Electrical Installation Condition Report): A report on the safety of a property's electrical installations. Since 2020, landlords in England must have a satisfactory EICR before letting to new tenants (and for existing tenancies from April 2021). The report must be renewed at least every five years.
Gas safety certificate: An annual check carried out by a Gas Safe registered engineer on all gas appliances and flues in a rental property. Landlords must provide a copy of the certificate to tenants within 28 days of the check.
LTV (Loan to value): The mortgage amount expressed as a percentage of the property's value. A 75% LTV mortgage means you borrow 75% and put down a 25% deposit. BTL mortgages typically require a lower LTV (higher deposit) than residential mortgages.
Break-even point: The point in time at which cumulative rental income equals the total cash invested (deposit, fees, and refurbishment costs). The Deedty AI property management calculator shows a break-even chart so you can visualise when a deal turns profitable.
Capital growth: The increase in a property's market value over time. Capital growth contributes to total ROI alongside rental income. Deedty AI property management models growth projections using HM Land Registry price indices.
HMO (House in Multiple Occupation): A property rented to three or more tenants who form two or more separate households and share facilities (kitchen, bathroom). Larger HMOs require a mandatory licence from the local authority and are subject to additional safety and management standards.

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Definitions of common UK property investment terms used in Deedty AI property management and across the buy-to-let industry.

Gross yield

Annual rental income divided by the property purchase price, expressed as a percentage. Gross yield does not account for running costs, voids, or mortgage payments. It is the simplest measure for comparing rental properties at a glance.

Net yield

Annual rental income minus operating expenses (maintenance, management fees, insurance, ground rent, etc.) divided by the purchase price. Net yield gives a more realistic picture of return than gross yield because it factors in ongoing costs.

Cash-on-cash return

Annual pre-tax cash flow divided by the total cash you invested (deposit, stamp duty, legal fees, refurbishment). Cash-on-cash return focuses on the money you actually put in, making it especially useful for leveraged (mortgaged) purchases.

Return on investment (ROI)

Total gain from the investment — including rental profit and capital appreciation — divided by total cost, expressed as a percentage. ROI can be annualised to compare deals of different holding periods.

BRRR

Buy, Refurbish, Refinance, Rent. A strategy where you purchase a below-market-value property, refurbish it to increase its value, refinance onto a standard buy-to-let mortgage (pulling out your initial capital), and then rent it out. The Deedty AI property management calculator models each stage so you can see equity released, revised yields, and adjusted returns.

Buy to let (BTL)

Purchasing a residential property specifically to rent it to tenants rather than to live in. BTL mortgages have different criteria from residential mortgages, typically requiring a larger deposit and assessed on expected rental income.

Stamp duty (SDLT)

Stamp Duty Land Tax, a tax payable when you purchase property in England or Northern Ireland above certain thresholds. Additional properties (including most BTL) attract a surcharge. Scotland and Wales have their own equivalents (LBTT and LTT respectively).

Void period

A period when a rental property is unoccupied between tenancies. Void periods reduce annual income and should be factored into yield and ROI calculations. The Deedty AI property management portfolio tracker records void periods per property.

EPC (Energy Performance Certificate)

A certificate rating a property's energy efficiency from A (most efficient) to G (least efficient). Landlords in England and Wales must have a valid EPC before letting a property, with a current minimum rating of E. Deedty AI property managementpulls EPC data from the government's Open Data Communities register.

EICR (Electrical Installation Condition Report)

A report on the safety of a property's electrical installations. Since 2020, landlords in England must have a satisfactory EICR before letting to new tenants (and for existing tenancies from April 2021). The report must be renewed at least every five years.

Gas safety certificate

An annual check carried out by a Gas Safe registered engineer on all gas appliances and flues in a rental property. Landlords must provide a copy of the certificate to tenants within 28 days of the check.

LTV (Loan to value)

The mortgage amount expressed as a percentage of the property's value. A 75% LTV mortgage means you borrow 75% and put down a 25% deposit. BTL mortgages typically require a lower LTV (higher deposit) than residential mortgages.

Break-even point

The point in time at which cumulative rental income equals the total cash invested (deposit, fees, and refurbishment costs). The Deedty AI property management calculator shows a break-even chart so you can visualise when a deal turns profitable.

Capital growth

The increase in a property's market value over time. Capital growth contributes to total ROI alongside rental income. Deedty AI property management models growth projections using HM Land Registry price indices.

HMO (House in Multiple Occupation)

A property rented to three or more tenants who form two or more separate households and share facilities (kitchen, bathroom). Larger HMOs require a mandatory licence from the local authority and are subject to additional safety and management standards.