When it comes to making money with property, there are several options.
Renting out your your house (or flat) is one of these.
So, what factors should consider if you want to rent out your house? And what are the advantages if you decide to do it?
Read on to find out.
Things to consider before renting out your property
Renting out your property is not easy, and while property ownership is often described as ‘passive income’, i.e., an income you don’t have to work for.
This is certainly not the case… Being a landlord can be stressful
Costs
There are lots of ongoing costs associated with renting out your house.
So, while it can potentially provide a route to financial freedom in the long-term, you will have to manage your finances carefully to make healthy margins. There are costly issues to consider, such as:
- Damage to your property
- Rent arrears
- Refurbishments required.
Landlord insurance will cover come costs.
Legal compliance
As a landlord who is renting out their house, you are also obligated to follow all the legal requirements of doing so.
Some of these can be complicated and unexpected, so completing thorough research and meeting all your requirements can be a challenge. Documentation required will include:
- An Energy Performance Certificate (EPC)
- Gas Safety Certificate
- Electrical Appliance Safety.
And many more things besides. Keeping up with all the legislation, and spending money on tests and documents, can be a hassle.
Void periods
Thirdly, practically every landlord goes through ‘void periods’ where there is no one renting out their property.
This will be a challenging period financially, as you will not be making any money from the house, but there will still be costs to pay.
The condition of the UK property market is not in your control, and if the market conditions are poor, it may prove extremely challenging to find a tenant for your flat.
Above all, it is critical that you have the time available to manage all the above aspects involved with renting out your flat.
Some people choose to use a letting agent as a means of reducing the time commitment involved.
Advantages of renting out your flat
Income generation
Renting out your flat enables you to unlock an additional source of income.
Even if you have a full-time job, the amount of money you earn will greatly increase if you are making a profit from your flat, too.
A potential full-time career
Some people even make property ownership a full-time pursuit, and if your goal is to achieve this one day.
Renting out your flat can be an excellent first step to achieving financial freedom, or at least to leaving your existing job.
Fall-back option
Another advantage of renting out your flat is that it gives you the ‘fall-back’ option of having somewhere to stay if you fall onto hard times.
Although you will have to give your tenants a reasonable eviction notice, the terms of which may vary depending on your contract.
Is is profitable to rent out my flat?
It is completely possible to make a profit by renting out your flat in 2025.
Some flat owners choose to rent it out because it offers more long-term financial opportunities than selling a tenanted property.
If you own a flat in a big city (as opposed to small towns or the countryside), you are less likely to face void periods.
In this instance, it might be helpful to know the most profitable postcodes in the UK to see if your area is on there.
You should also aim to list your flat on the market during a period of high demand. This may enable you to increase what you charge for rent.
Furthermore, it is important that you choose your tenant carefully. Good tenants will less likely create problems or pay late.
Finally, it is important that you maintain healthy profit margins when renting out your flat. A general guide is to aim for a 30% profit margin.
