Many landlords operate without a clear “value for money matrix,” often unaware that they are actually losing money after accounting for voids, maintenance, and taxes. In this video, Adam and Jesse from ForTheLandlords reveal the specific financial targets you should be hitting and how to measure your “Total Property Return.”

The Target Numbers:

1. The Cash Flow Goal: £350 – £400 per month For a standard Buy-to-Let property (typically valued up to £150,000 in the Midlands or North of England), you should aim for a net cash flow of around £400 after all expenses and management fees.

2. The Total Return Goal: £1,000 per month While cash flow pays the bills, capital growth is where the real wealth is built. Adam explains that when you combine your monthly rental profit with the average annual capital gain (measured over the long term), a well-chosen property can effectively “make” you £1,000 a month.

Why Most Landlords Are Losing Money:

• The Self-Management Trap: Roughly 85% of UK landlords manage their own properties. Adam notes that nearly every self-managed landlord he meets has rents below market level, ongoing maintenance issues, or tenant arrears.

• The “Void” Killer: An empty property is the fastest way to wipe out a year’s profit. Professional management focuses on “avoiding the void” by planning turnovers weeks before a tenant leaves.

• Tax Inefficiency (Section 24): If you aren’t structured correctly (e.g., using a Limited Company), you could be taxed on your turnover rather than your profit. In some cases, landlords end up paying more in tax than they actually take home in profit.

How to Optimize Your Profit:

• Market Level Rents: Many landlords “feel bad” raising rents, but keeping them below market level prevents you from reinvesting in the property’s maintenance and compliance.

• Refinance Discipline: Don’t just “set and forget” your mortgage. Moving to a better product transfer can instantly save you £50–£100 a month in interest costs.

• Arrears Management: Jump on late payments immediately. Using professional referencing (not just “friend of a friend” checks) is the best way to avoid bad debt from the start.

The Bottom Line:

Property is a blend of Cash Flow (monthly income) and Capital (long-term growth). If you aren’t measuring both, you aren’t seeing the true performance of your investment.