Six Factors That Will Determine If a Rental Property Will Be Profitable


If you’re looking for some extra cash each month, becoming a landlord may be a viable option. When done correctly, property management can be a lucrative and secure business. There are quite a few factors to consider when deciding if a rental property is profitable, so here are six things to keep in mind.


What kind of area would you plan to rent in? This choice will affect every choice coming after it. What kind of homes or apartments is available in that area? What kind of people will that area attract? Check for good schools, parks, shopping, and recreational activities in the area. An area with a lot of vacancies should be a red flag. A good community can significantly increase the property value and therefore increase the rent you will be able to charge, but an area with low property rates can be profitable as well. Study your options carefully and choose the best that is right for you.


You will have to pay income tax on the rent you bring in. On the other hand, you can earn tax breaks for renting a property. Research what the tax situation would look like in the area to determine what they would earn or cost you.

Cost of Maintenance

Property management is going to cost you money. Cost often depends on the age of the home and appliances. How much will it cost to maintain the yard? To regularly clean or to make repairs? You also need to consider the water and drainage system. If you are not sure, best to ask for professional advice from companies like Lagan Plant to help you determine the water system of the property. Talk to other people in the area and try to figure out how much maintenance could cost you a month.


Once you have figured out your costs, it’s time to figure out how much you could bring in. The best indicator is checking other properties in the area to see what they are renting for. Your rate should be similar to those around your property.

Vacancies and Late Payments

Would you be able to survive if the property was vacant for a month or two? What about if your tenants could not pay on time? You can’t plan on receiving a rental payment every month, on time, always. Vacancies happen, tenants happen, and you have to be able to plan ahead for these possibilities.

What’s Considered Profitable

In most areas if you end up with a £100-300 profit each month, then the property is considered a success. You have to decide if this is enough money for you to put the time and work into a property. To make a liveable wage as a landlord, you would have to manage several properties at once.

Renting properties is a lot of work, but with the right skill and know how it can be extremely successful. Use these tips to choose the most profitable property possible.

Compare listings