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14/7/25 8:13 pm
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One of the biggest challenges for new landlords and those growing their portfolios is finding a rental property that delivers the margins and profits they’re aiming for. Once the property is up and running, it’s vital to monitor yields, cashflow and returns to ensure the investment continues to perform as expected.
As house prices and legal compliance costs have increased over the years, landlords have had to invest more capital upfront, reducing return rates. When interest rates rose sharply a couple of years ago, many landlords coming off fixed-rate mortgages saw repayments jump significantly, directly affecting profits.
Letting property can still be highly profitable, but it’s crucial to understand the risks and ‘stress-test’ your figures against potential cost increases.
Here are five key steps to help safeguard your margins:
1. Charge the best possible market rent
Rental income underpins your investment, so ensure you’re achieving the highest possible rate for your area. That means:
• Staying informed about tenants’ wants and needs to offer accommodation that attracts quality renters willing to pay top rates.
• Keeping the property in excellent condition to retain tenants and enable quick re-lets.
• Reviewing rent annually.
Keep in mind that under the new Renters’ Rights changes, rent can only be increased once a year, and you can’t accept more than the advertised amount.
2. Maintain the property well
Have a maintenance schedule for exterior checks, redecoration and upgrades, setting aside part of your profits each month to fund these works. Ensure your property manager conducts inspections every 6–12 months and reminds tenants to report any issues early to avoid costly repairs later.
Good maintenance not only helps retain reliable tenants but also protects the property’s capital value and your equity. Under the upcoming Renters’ Rights changes, any reports of damp or mould must be investigated and addressed promptly by landlords and agents.
3. Review costs every 6–12 months
Even with rising costs, there are always competitive deals to be found from companies eager to keep existing customers or attract new ones. Take time twice a year to review all regular outgoings and see where savings can be made.
4. Work with a buy-to-let specialist broker
Your mortgage repayment is likely your largest monthly cost, and even a 0.25% interest reduction can improve cashflow. A good broker will regularly review your mortgage to ensure you’re always on the best available deal and alert you when it’s time to switch. Check in at least six months before your current deal ends to allow time to find a new product.
If you’d like expert buy-to-let specific mortgage advice, contact the specialists at our sister company, Mortgage Scout.
5. Take out appropriate landlord insurance
Since the Covid pandemic, rising labour and material costs have made repairs far more expensive. While insurance premiums have also increased, having the right cover can save you significant money if your property suffers damage.
It’s also wise to consider rent guarantee insurance, ensuring continued income if a tenant stops paying rent. This will become even more important once the Renters’ Rights Bill passes, Section 21 is abolished, and changes to the Section 8 rent arrears ground are introduced.
At Leaders, if your property is fully managed by us, we’ll handle rent increases, maintenance, and ensure you benefit from the best contractor rates available.
To talk through managing your costs and maximising returns, speak with our buy-to-let experts at your local branch - we’re always happy to help.
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