Your sourcer quoted you 9% yield. Here is what they did not tell you. Yield is not the number that tells you how hard your money is working. ROCE is. Return on Capital Employed. It is the metric I use on every single property I present and the one I rarely see other portfolio builders include. Here is the difference. Gross yield tells you the relationship between rent and purchase price. Useful as a starting point. Limited as a decision-making tool. Net yield accounts for costs. Better. Still incomplete. ROCE tells you how hard your actual cash is working. The formula is straightforward. Net annual profit divided by total capital employed, expressed as a percentage. ...even an ex-History Teacher can do that one! Total capital employed is everything you put in. Deposit. SDLT. Legal fees. Sourcing fee. Refurbishment costs. Every pound that left your account to make this investment happen. Here is why it matters. Take two properties with identical net yields. Different purchase prices. Different refurb costs. Different amounts of cash required. The property that needed less of your capital will almost always deliver a higher ROCE. Same yield on paper. Very different return on your actual money. That is the number worth asking for. When I present a property I always include ROCE alongside yield. Because a 9% gross yield tells you very little if you cannot see how hard the cash you actually deployed is working. Next time someone presents you a property, ask for the ROCE. If they cannot give it to you, ask yourself why. Don't work with a 'sourcer' who quotes you a yield and considers the analysis done. Work with a Partner who shows you what your actual capital is returning before you commit to anything. Sensible Investments, Unrivalled Support™ Do you factor ROCE into how you evaluate a property? Or has yield always been the headline number? #TheTeacherLandlord #GoldilocksZone #BuyToLet

Posted by James Lovell-Smith at 2026-06-08 09:01:11 UTC