Resources & Tools

CJ Property Investment Value Calculator

Value commercial and residential investment property the way valuers, lenders and investors do.

Disclaimer. This tool provides an indicative valuation only. It does not constitute Red Book valuation, lending or investment advice. Outputs depend on income quality, lease structure, asset condition and prevailing market yields.

Step 1

Property setup

Property name

Property type

Yield basis

The headline NIY/GIY label follows this toggle. The gap between Gross and Net Initial Yield at portfolio level comes from purchaser's costs below.

Purchaser's costs

All-in fees (incl. VAT)

Standard valuation shorthand — applied as a flat % of Market Value, on top of SDLT.

Step 2

Tenancies & income

Unit 1·Under-rented

Unit name

Area (sq ft)

sq ft

Status

Auto valuation method

Term & Reversion

Term & Reversion — passing rent for 5 years, then steps to ERV (no void).

Passing rent

£/yr

ERV

£/yr

First lease event

"None" is hidden — passing differs from ERV, so the unit must revert at some point.

Years to event

yrs

Will tenant renew?

Term yield

Reversion yield

Total passing

£60,000

Total ERV

£65,000

WAULT

5.0 yrs

Step 3

Capital expenditure (optional)

Market Value

£863k

Net of purchaser's costs

Net Initial Yield

6.58%

Passing ÷ gross price (MV + purchaser's costs) — institutional convention.

Gross Initial Yield

6.95%

Passing ÷ Market Value (net of purchaser's costs).

Equivalent Yield

6.95%

Average yield over term + reversion

Reversionary Yield

7.13%

ERV ÷ gross price — if fully let at ERV today.

WAULT

5.0 yrs

Moderate

£ per sq ft

£345

2,500 sq ft total

Running Yield (Y1)

6.58%

Year-1 net income ÷ gross price.

Capital value waterfall

Yield sensitivity

Base term 6.50% · Base reversion 7.00%

Holds ERV, lease events, void/rent-free and purchaser's costs constant. Flexes term and reversion yields independently around the portfolio ERV-weighted base. Δ shown vs base/base Market Value.

Rev ↓ / Term →	-25 bps	-10 bps	base bps	+10 bps	+25 bps
-25 bps	£895k +3.72% NIY 6.34%	£894k +3.61% NIY 6.35%	£894k +3.54% NIY 6.36%	£893k +3.46% NIY 6.36%	£892k +3.35% NIY 6.37%
-10 bps	£877k +1.57% NIY 6.48%	£876k +1.46% NIY 6.49%	£875k +1.38% NIY 6.49%	£875k +1.31% NIY 6.50%	£874k +1.20% NIY 6.50%
base bps	£865k +0.18% NIY 6.57%	£864k +0.07% NIY 6.58%	£863k base NIY 6.58%	£863k -0.07% NIY 6.59%	£862k -0.18% NIY 6.60%
+10 bps	£853k -1.16% NIY 6.66%	£852k -1.27% NIY 6.67%	£852k -1.34% NIY 6.67%	£851k -1.41% NIY 6.68%	£850k -1.52% NIY 6.69%
+25 bps	£836k -3.10% NIY 6.80%	£836k -3.21% NIY 6.80%	£835k -3.28% NIY 6.81%	£834k -3.35% NIY 6.81%	£833k -3.46% NIY 6.82%

Yield comparison

10-year income projection

Per-unit valuation

Unit	Passing	ERV	Term	Reversion	Costs (PV)	Total	Method
Unit 1	£60,000	£65,000	£249,341	£662,059	—	£911,399	T & R

Risk indicators

Vacant units

Over-rented exposure

0.00%

Reverts within 2 yrs

0.00%

Largest unit share

100.00%

CJ investment insights

Equivalent yield of 6.95% is 37bps wider than NIY — reversionary upside is being captured over the term.
Purchaser's costs of £48,198 (5.3% of gross) reduce Market Value materially — SDLT alone is £32,660.

Detailed calculation breakdown

Click to expand — full surveyor-grade workings for every figure above.

▸

Per-unit valuations▸

Unit — Unit 1▸

Inputs

Statusoccupied

Passing rent£60,000 / yr

ERV£65,000 / yr

Lease eventexpiry

Tenant decisionrenew

Years to event5

Term yield6.500%

Reversion yield7.000%

Void months6

Rent-free months3

Reletting fee10% of ERV

Void cost50% of ERV

Method & result

MethodTerm & Reversion

Rent positionunder-rented

Total value£911,399

Term YP = (1 − (1+y)^−n) / y = (1 − (1+0.0650)^−5) / 0.0650 = 4.155679 Term value = passing × Term YP = £60,000 × 4.155679 = £249,341

Valuation convention: void is deducted as a cost (below), not deferred — only rent-free defers the reversion.

Reversion YP (perp) = 1 / y = 1 / 0.0700 = 14.2857 PV factor = 1 / (1+y)^(n + rent-free) = 1 / (1+0.0700)^(5 + 0.250) = 0.712986 Reversion = ERV × YP × PV = £65,000 × 14.2857 × 0.712986 = £662,059

Total = Term + Reversion − Costs = £249,341 + £662,059 − £0 = £911,399

Portfolio aggregation▸

Sum of unit values

Unit 1£911,399

Σ Sum of unit values£911,399

ERV-weighted reversion yield (used to discount capex) = Σ(yᵢ × ERVᵢ) / Σ ERVᵢ = 7.0000%

Capex PV£0 (no items)

Gross capital value = Σ unit values − Capex PV = £911,399 − £0 = £911,399

Market value (net of purchaser's costs)▸

Solve for MV by bisection: MV + SDLT(MV) + 1.80% × MV = £911,399 → MV = £863,202

SDLT(£32,660)

Acquisition fees (1.8% incl. VAT)(£15,538)

Σ Purchaser's costs£48,198

Check: MV + costs = £863,202 + £48,198 = £911,399 Gross capital value = £911,399

Yields▸

Net Initial Yield = passing ÷ gross-of-costs price (MV + purchaser's costs) = £60,000 ÷ £911,399 = 6.583%

Gross Initial Yield = passing ÷ Market Value (net of costs) = £60,000 ÷ £863,202 = 6.951%

Reversionary yield = ERV ÷ gross-of-costs price = £65,000 ÷ £911,399 = 7.132%

Running yield = Year-1 net income ÷ gross-of-costs price = £60,000 ÷ £911,399 = 6.583%

Equivalent yield: solved numerically so the PV of the projected cashflow + perpetual reversion equals the gross capital value. Result: 6.949%

WAULT▸

Unit 1 — 5 yrs × ERV £65,000£325,000

WAULT = Σ(yearsToEvent × ERV) / Σ ERV = £325,000 ÷ £65,000 = 5.00 yrs

About this tool

What the Property Investment Value calculates

A property investment is not a single rent times a single yield. It is a stack of tenancies, each with its own passing rent, ERV, lease length and break, set against purchaser's costs, void allowances, capex and the yield basis a buyer will actually accept.

This calculator models a UK investment property the way valuers, lenders and institutional investors do — Term & Reversion per unit, Net Initial Yield, equivalent yield, WAULT, purchaser's costs and a clear set of risk indicators.

It is built for surveyors, asset managers, family offices, debt funds and special situations teams who need a defensible valuation in minutes, not a one-line broker yield.

Methodology

How it works

Term & Reversion per unit

Each unit is valued in two slices. The Term capitalises passing rent to the earlier of expiry and break at a Term yield. The Reversion capitalises ERV from that point onwards at a Reversionary yield, then discounts back. The sum, less the unit's share of non-recoverables and capex, is the unit value.

Net Initial Yield and equivalent yield

NIY is day-one net rent divided by gross price (price plus purchaser's costs). Equivalent yield is the single internal rate that reconciles Term and Reversion cash flows. The calculator reports both — NIY for price evidence, equivalent yield as the analytical anchor.

WAULT and lease risk

WAULT (weighted average unexpired lease term) is reported to expiry and to break. Long WAULT to break with strong covenants reduces the equivalent yield; short WAULT or a cluster of breaks in the same year increases it.

Purchaser's costs and capex

SDLT is calculated automatically from the rate card. Agent, legal and survey fees default to institutional norms and can be overridden. Capex is deducted from value as a £ amount rather than netted off rent, because the timing of works rarely matches the rent flow.

Assumptions & limitations

Key assumptions

Yields are user inputs — the calculator does not pick them. Yield evidence should come from comparable transactions or RICS valuation evidence.
Each unit's value is independent — the calculator does not apply a portfolio premium or discount. Where a portfolio premium is justified by the buyer pool, apply it manually.
SDLT uses current bands; the 6+ dwellings election is modelled separately in the SDLT calculator.
Ground rents, head leases and overage payments are not modelled — treat these as adjustments to the result.
Output is an indicative investment value, not a Red Book valuation. For lending, acquisition or financial reporting purposes, instruct a regulated valuer.

When you'd use it

Typical scenarios

Underwriting a portfolio acquisition

Build the rent roll, set the Term and Reversionary yields per unit, layer SDLT and capex, and read the value, NIY, equivalent yield and WAULT in one screen.

RICS Red Book valuation →Acquisitions & Disposals →

Pricing a loan or refinancing

Lenders need an LTV that survives stress. Run base, downside and recovery cases by flexing yields and ERVs.

LPA Receivership →

Asset management decisions

Quantify the value uplift of letting a void unit, agreeing a re-gear or running capex — before committing the spend.

Asset Management →

Expert evidence and dispute work

Term & Reversion per unit, with the equivalent yield and WAULT exposed, is the format tribunals and the courts expect.

Expert Witness →

FAQ

Property Investment Value — frequently asked

What is Term & Reversion?

Term & Reversion is the standard UK valuation method for reversionary income. The Term capitalises current passing rent for as long as it is contractually secured (to expiry or break). The Reversion capitalises ERV from that point forward and discounts back. The sum is the income value of the unit.

When should I use equivalent yield rather than NIY?

Use NIY for price evidence and broker comparability — it is the day-one number the market quotes. Use equivalent yield when the property has a reversion: it reconciles the Term and Reversion cash flows into a single rate and is the right number to analyse risk against.

Does the calculator handle mixed-use buildings?

Yes. Add each unit with its own use, passing rent, ERV and lease terms — the calculator values each independently and aggregates. Use the SDLT calculator alongside to confirm the correct rate card.

Is the output a Red Book valuation?

No. This tool produces an indicative investment value to support analysis, underwriting and discussion. A Red Book valuation requires an instructed RICS Registered Valuer, formal terms of engagement and asset inspection.

How does the calculator treat tenant breaks?

Each unit's Term runs to the earlier of expiry and the first tenant break. WAULT is reported both to expiry and to break so you can see the income gap a clustered break year creates.

Can I model capex and non-recoverables?

Yes. Capex is entered as a £ amount and deducted from value. Non-recoverables and management can be set per unit as % or £ and are netted off income before capitalisation.

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