REITs vs BTL.

REITs vs BTL comparison: same capital, different vehicles. 100k in REITs (5% yield + 3% appreciation = 8%) vs 100k in BTL (5% net yield + 3% appreciation = 8%). Same headline return but very different reality - REITs liquid/passive/diversified, BTL illiquid/active/concentrated.

Example: 100k capital. REITs at 8% total return: 216k after 10 years, fully liquid, sell anytime, dividends accumulate in tax-advantaged savings account tax-free. BTL same 8% gross: ~200k after 10 years (slightly lower due to transaction costs on entry/exit), illiquid, tenant management required. REITs win on convenience and tax efficiency in tax-advantaged accounts.

BTL advantages over REITs: leverage (75% LTV mortgage on 400k = control 400k with 100k cash), direct asset ownership, control over decisions. REIT advantages: liquidity (sell instantly), diversification (1 REIT = 100s of properties), no management burden, lower minimum (100s), tax efficient in tax-advantaged savings account. Best approach for most: REITs in tax-advantaged savings account for tax efficiency, BTL only for those wanting hands-on real estate engagement and willing to leverage.

Run it with sensible defaults

Using investment capital of 100,000, reit dividend yield of 5%, reit price appreciation of 3%, btl net yield of 5%, the calculation works out to 0.00. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Investment Capital, REIT Dividend Yield %, REIT Price Appreciation %, BTL Net Yield %, and BTL Property Appreciation % — do not pull with equal force. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.

How the math works

Compound capital at total return rate for each option; difference = winner. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.