How the rent-to-rent calculation works Serviced accommodation: annual accommodation revenue = units × available nights per unit × nightly rate × paid occupancy. Net cleaning costs are spread across the average stay. Monthly results are annual totals divided by 12.Room letting / HMO: annual rent = rooms × monthly room rent × 12 × paid occupancy. Occupancy represents collected room-months, so it can reflect voids and non-payment.Operating cash flow: collected revenue minus landlord rent, fixed bills, revenue-based fees, maintenance reserve and occupancy-linked costs. Fixed monthly costs are paid for all 12 months, even during planned closure or at 0% occupancy.Annual cash-on-cash ROI: annual operating cash flow ÷ upfront cash committed × 100. Cash committed includes non-refundable setup costs, refundable deposit and working capital. No ROI is shown when that total is zero.Break-even occupancy: annual fixed costs ÷ the operating contribution at full occupancy. If more than 100% would be required, the entered rate and cost structure cannot break even. Setup recovery is excluded from this operating break-even point.Use consistent figures, including unrecoverable VAT within the appropriate cost inputs. Tax, VAT calculations, financing, property appreciation, deposit return and exit proceeds are excluded. This is an annual steady-state model: timing of payments, opening delays and seasonal occupancy changes need a separate cash-flow plan.
Use the net cleaning cost field after any cleaning-fee recovery, and keep that fee out of the accommodation nightly rate. Do not enter the same cost in more than one field. Projected returns are estimates, not guarantees.
