The short answer
It depends on your market, your financing, and your costs. That’s not a dodge — it’s the reason generic “yes or no” articles about buy-to-let are useless. The numbers vary dramatically between countries, and even between cities within the same country.
What we can do is walk through the factors that matter and show you how to run the numbers properly.
Interest rates: the biggest variable
Interest rates are the single largest factor in whether a leveraged property investment cash-flows. Here’s where rates sit across major markets:
| Country | Typical mortgage rate | Typical term |
|---|---|---|
| South Africa | ~10.25% | 20 years |
| United States | ~6.25% | 30 years |
| England | ~5.0% (BTL fixed) | 25 years |
| Australia (NSW) | ~6.5% | 30 years |
| Dubai (UAE) | ~4.5% | 25 years |
| Canada (Ontario) | ~4.25% | 25 years |
| Ireland | ~3.5% | 30 years |
Higher rates mean higher mortgage payments, which eat into your rental income. A property that cash-flows comfortably at 3.5% might barely break even at 6.5%.
The key question isn’t “are rates high?” — it’s whether your rental yield exceeds your borrowing cost after expenses. If you’re earning 6% net yield and paying 5% on your mortgage, the spread works. If you’re earning 4% net yield and paying 7%, it doesn’t.
What you’re actually paying for
The purchase price is just the start. Every country has its own stack of transaction costs that increase your total investment:
Transfer taxes vary the most. Dubai charges a flat 4% DLD fee. England’s Stamp Duty starts at 0% and reaches 12% on portions above £1.5 million — plus a 5% surcharge if it’s not your primary residence. South Africa’s Transfer Duty ranges from 0% to 13%. Greece has a flat 3.09% transfer tax.
Closing costs add another 1-5% depending on the country. These include legal fees, property surveys, registration fees, and mortgage-related costs. In some countries (like Portugal), there’s also stamp duty on the mortgage itself.
Ongoing costs are the ones that quietly erode your yield. Property tax, insurance, maintenance, management fees, and body corporate/HOA levies can easily total 2-4% of the property’s value per year.
Our country guides break down every cost category for each market.
Capital gains tax: the exit cost people forget
When you eventually sell, capital gains tax can take a significant bite:
- England: 18% or 24% on the gain, depending on your income bracket
- Ireland: flat 33% on the gain
- South Africa: up to 18% effective rate (via 40% inclusion in income tax)
- United States: 15-20% federal, plus state taxes and depreciation recapture (25%)
- Australia: 50% of the gain included in your income (after 12 months)
- Dubai and Greece: no capital gains tax (Greece’s is suspended until December 2026)
Primary residences are generally exempt, but investment properties are not. This is a real cost that should factor into your projected return — which is why our calculator includes a full exit scenario with CGT modelling.
When buy-to-let works
Buy-to-let tends to work well when:
Rental yield exceeds your all-in borrowing cost. If your net yield is 5% and your mortgage rate is 4%, you have positive leverage working for you.
You have a long time horizon. Property is illiquid and has high transaction costs. The benefits of leverage, appreciation, and mortgage paydown compound over time. Short holds (under 5 years) are often eaten up by buying and selling costs.
You buy below replacement cost. In markets where construction costs exceed the price of existing stock, there’s a natural floor on values.
You’re in a tax-advantaged structure. Different countries offer different benefits — depreciation deductions in the US, interest deductions in many markets, and primary residence CGT exemptions almost everywhere.
When it doesn’t
Buy-to-let struggles when:
Rates are high relative to yields. If you’re paying 10% on your mortgage and earning 6% gross yield, the maths is brutal after expenses.
Regulatory costs are rising. Some markets (particularly England) have seen increasing compliance costs — EPC requirements, licensing, Section 24 mortgage interest restrictions — that squeeze landlord margins.
You’re undercapitalised. Vacancy, maintenance, and interest rate rises all require cash reserves. Running tight on a single property is risky.
You’re speculating on appreciation alone. If the property doesn’t cash-flow and you’re banking on values going up, you’re speculating, not investing.
Run the numbers for your market
The only way to know if a specific property works is to model it properly — with all the local costs included.
Our free calculator handles this for 9 countries:
- Purchase costs including transfer tax and closing costs
- Ongoing costs with country-specific line items
- Mortgage modelling with local interest rates
- 10-year projection with equity growth
- Exit scenario with capital gains tax
Pick your country, enter your numbers, and see exactly what the property will return. It takes about 2 minutes and runs entirely in your browser — no signup required.