Guides written to be useful, not to generate enquiries.

Gross yield is annual rent divided by purchase price. It ignores voids, management, maintenance, insurance, compliance, service charges, ground rent, letting fees and finance costs. It is not a lie, but it is not useful for deciding anything either.

Net yield deducts the running costs. Cash-on-cash return goes further and measures the annual profit after finance against the actual cash you put in — deposit, stamp duty, legal fees, refurbishment and furnishings. That last figure is the one that tells you whether the capital is working.

A realistic appraisal assumes a void allowance, a maintenance allowance, and a real management cost even if you intend to self-manage — because your time has a value and because you may not self-manage forever.

Re-derive the value from sold comparables on the same street type, same property type and same condition, within the last six months where possible. Asking prices are marketing, not evidence.

Re-derive the rent from properties currently let or recently let nearby, not from an aspirational figure. Call two local letting agents and ask what it would actually achieve.

Get the refurbishment costed by a trade who has seen it, and add a contingency of at least ten to fifteen per cent. Refurbishment estimates supplied by the seller of the deal are almost always the weakest number in the pack.

Then re-run the whole thing with rent ten per cent lower, works twenty per cent higher and finance two points more expensive. If it still works, you have something. If it collapses, you have a marketing document.

The classic structure is a reservation fee taken quickly, against an opportunity that is presented as scarce, from a person or brand whose corporate identity is vague. The property may not even exist in the form described, and the same deal may have been sold to several people.

Legitimate operators are boring by comparison. They have a company number you can check, a registered office, a named director, written fee terms before any work starts, and a requirement to verify your identity and funds before they will act for you.

Guaranteed returns deserve particular suspicion. Property returns are not guaranteed by anybody, and where a fixed payment is genuinely being offered — as in a rent-to-rent agreement — it is a contractual obligation of a company you should be checking, not a property characteristic.

Certification alone recurs on a rolling calendar: gas annually, electrical every five years, energy performance every ten, alarms tested at each tenancy. Licensing where a scheme applies can be a substantial four-figure cost per property per licence period.

Then there is the void allowance, tenancy set-up costs, referencing, inventory, deposit protection, insurance, and a maintenance reserve. Older properties consume more of this than newer ones, and period properties considerably more.

Tax treatment matters too and is beyond our scope to advise on — the restriction on finance-cost relief for individually held property changed the arithmetic for many higher-rate landlords, and whether personal or corporate ownership suits you is a question for an accountant, not a sourcing agent.

A single-let property in a stable area is the quietest asset in residential investment. It will not produce spectacular numbers, and it will also not ring you at eleven at night.

HMOs and serviced accommodation can produce materially stronger returns, and they are operating businesses rather than passive investments. They carry licensing, compliance, furnishing, cleaning and management burdens that do not go away, and they punish inattention.

Refurbishment and development projects add construction risk on top of everything else. They are entirely viable, but the first one should not be ambitious, and the contingency should be real.

The honest question is not which strategy returns most. It is which strategy you will still be running properly in three years.

Property forecasting has an unimpressive track record. Interest rates, employment, planning policy, tax treatment and sentiment all interact, and the people making annual predictions are rarely held to them afterwards.

What can be done usefully is buying in a way that survives being wrong. That means not depending on capital growth to make a deal work, not gearing to a level that breaks at a higher rate, and holding a reserve that gets you through a long void or a boiler replacement in the same quarter.

If a deal only works because the market goes up, it isn't a deal — it is a bet with extra paperwork.