An Adarivo guide prepared with AI assistance and checked against source records. Share corrections and update suggestions through the contact page.
Define the income being compared
Monthly rent, collected annual rent and money retained by the owner are different. Ask which currency and period a rent quote uses and whether it comes from an executed contract or a forecast. Deposits are not income. Add legal costs, charges, furnishing and initial expenses to purchase cost. Compare the same currency, period and cost scope rather than headline percentages.
An entirely hypothetical gross example
These figures are teaching assumptions, not current market prices or an EvimAda offer. Assume purchase £100,000, other initial costs £10,000 and monthly rent £600. Twelve collected months produce £7,200 gross: 7.2% of purchase price or 6.55% of the £110,000 total initial cost. Two vacant months reduce collections to £6,000. An advertised monthly rent therefore does not automatically produce twelve months of income; actual collections and terms matter.
Name the remaining result accurately
Assume £1,800 yearly management, owner-paid common charges, insurance and maintenance. Subtracting this from £6,000 leaves £4,200, or 3.82% of £110,000. This is operating income before tax and financing, not fully net profit. Confirm personal tax treatment with a specialist and finance costs with the bank. Show major-repair reserves separately from expenses already incurred. Loan principal repayments are not identical to accounting expenses. Allow cash for unexpected work and late payments.
Decide with three scenarios
Vary vacancy, rent, operating costs and initial expenses under optimistic, base and cautious assumptions. Do not combine uncertain appreciation with rent into a guaranteed percentage. For guaranteed-rent claims independently review duration, payer, deductions, security and enforceability. EvimAda can help locate comparable offers; asking prices are not completed-transaction evidence. Adarivo and EvimAda are sister projects. Prefer transparent assumptions and a suitable risk budget to the largest advertised yield. Record the basis and confirmation date of each assumption. Keep actual and expected income in separate columns. When results change, preserve the original calculation and create a new version so the decision’s evidence stays visible.