Things to think about when buying to let

Lisa Parker
February 14, 2017


Becoming a landlord is not something you should do on a whim. Buying a Buy to Let property can be a significant investment and not without its risks – what’s more, being a landlord carries with it a number of responsibilities that you need to be prepared for.  


Before you sort out the mortgage you’ll need, it’s important that you take some time to research the type of property you’re going to buy and the area it’s in. Think about the type of tenants you want to attract and the sort of property that would appeal to them – are you looking to appeal to students, families or young professionals? Is the property in a good location and what work would need to be done to it before it can be rented out?  


When taking on a buy to let mortgage you’ll be looking at the monthly mortgage costs and the rental income that your property can earn (try our buy to let rental calculator). But don’t forget that you not may always have a monthly rent coming in – it may take a bit of time to find your first tenant and you may have gaps, or rental voids, between tenants.  


Make sure you have enough cash in reserve, say equivalent to 3 to 6 months mortgage payments, to ensure that you can always pay the mortgage even if you don’t have tenants in. You should also have a cash buffer to cover any maintenance costs such as boiler repairs or new appliances.

There are ways to insure against rental voids and other unforeseen costs – speak to an adviser for more information.  


Unlike other investments, like paying money into a pension, owning a buy to let property and being a landlord can involve quite a lot of time and management on your part. You can pay an agent to look after a lot of the ongoing management of a property but remember that this will cost you money – typically a percentage of the monthly rent – so you’ll need to factor this into your costs.  


You’ll also have specific responsibilities as a landlord such as making sure that gas and electrical appliances are in safe working order.  


As a landlord, any profit you make renting your property will be liable for income tax. If a property is in joint names then both owners will be liable.  


You are able to reduce your tax bill by offsetting certain costs associated with maintaining a rental property against the rental income that you receive. These costs can include:  

  • Mortgage interest (but not capital repayments).  
  • Ground rent and water rates.  
  • Fees such as letting and management fees, accountant and legal fees.  
  • Costs of property repairs and maintenance.  
  • A 'wear and tear' allowance for furnished properties.  
  • Buildings and contents insurance.

We recommend you speak to a tax adviser or accountant about how you can reduce your own tax bill.  

Tenancy deposit

If you rent out a property in England and Wales and on an Assured Shorthold Tenancy (AST) then you must place your tenants’ deposit in one of the 3 official tenancy deposit protection schemes.  


These government-backed schemes will hold on to the deposit on your behalf and if there’s a dispute with your tenants, the deposit will be protected by the scheme until the dispute is settled.

You can find out more information on these schemes on the government’s website.  


Should you ever need to evict a tenant, there are very strict procedures that you must follow. Hopefully it will never come to this, but if it does, make sure you know your rights in advance and what you need to do. More information can be found here.  

More information

Buy to let mortgage FAQs  

GOV. UK – Information for landlords from the Government

Citizens Advice – information for landlords

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