Buy-to-let is about more than purchase price and rental income. Borrowing, maintenance, management costs and regulatory responsibilities all affect what an investment ultimately delivers.
The Renters’ Rights Act has added another consideration for landlords in England, with major tenancy reforms in force since 1 May 2026 and further measures being introduced in phases. In this changing landscape, understanding the full cost and responsibilities of an investment before buying matters more than ever.
Look beyond the purchase price
Purchase price tells only part of the story. Two properties costing the same can deliver very different returns once rent, mortgage payments, maintenance, insurance, management fees, service charges and void periods are factored in.
Gross yield is a useful starting point, but it should not drive the decision alone. Looking at the full cost of owning and running a rental property gives landlords a more realistic view of what an investment could actually deliver.
Test the investment before testing the market
A sensible buy-to-let assessment should test several scenarios rather than rely on one ideal forecast. Looking at the wider financial picture can also reveal whether the investment still makes sense if costs rise or circumstances change:
- Expected rent based on realistic local evidence
- Mortgage payments and the effect of higher borrowing costs
- Letting and property management charges
- Maintenance, repairs, insurance and applicable service charges
- Allowance for vacant periods or unexpected expenditure
- Tax implications based on the landlord’s individual circumstances
- Licensing, safety and other compliance costs relevant to the property
Regulation belongs in the investment calculation
Compliance deserves attention before a buy-to-let purchase, not after it. The property type, tenancy and management approach can all create obligations that affect costs and day-to-day responsibilities. In England, assured shorthold tenancies generally became assured periodic tenancies from 1 May 2026, while Section 21 was abolished. Landlords now need to use the appropriate possession grounds and follow the correct process when seeking possession. With enforcement measures covering breaches of the new tenancy rules, accurate records and careful tenancy administration have become an important part of protecting an investment.
Related: The landlord’s rent review calendar: Building a 12-month rent strategy that stays fully compliant
The regulatory picture is still developing
Not every Renters’ Rights Act measure arrived at once. Further changes are being phased in, so landlords need to keep track of what is already required and what is still ahead.
The Private Rented Sector Database is expected to begin rolling out from late 2026, with mandatory registration and an annual fee planned as implementation progresses. The Landlord Ombudsman is being introduced separately, with mandatory membership currently expected in 2028. For investors, future compliance costs should therefore form part of longer-term financial planning.
Financing needs room for the unexpected
Borrowing can significantly affect buy-to-let returns, so the mortgage needs to be considered alongside the property itself. Lenders assess whether rental income can support mortgage costs, but passing their affordability checks does not necessarily mean the investment works financially for the landlord.
It is worth testing how the numbers hold up if borrowing costs rise, an unexpected repair is needed or the property sits empty between tenancies. Building some flexibility into the figures can make the investment better prepared for changes in costs or income.
Related: Making Tax Digital from April 2026: What Landlords Need to Know
Portfolio landlords need to look sideways too
When adding another rental property, landlords should consider how it fits within the wider portfolio. Buying in the same location or investing repeatedly in similar property types can increase exposure to the same risks.
Existing borrowing, refinancing dates, maintenance costs and cash reserves should also influence the decision. A property that looks attractive on its own may not be the right addition if it puts greater pressure on the rest of the portfolio.
Property management can influence investment performance
Property management is more than an operational choice. For landlords, it can also affect the time, cost and risk involved in running an investment.
Managing independently means keeping records, arranging repairs, meeting legal obligations and handling tenant communication. Professional property management can take on these day-to-day responsibilities while providing a consistent approach to maintenance, documentation and tenancy administration.
Local knowledge still decides whether the numbers are realistic
National trends provide useful context, but buy-to-let performance is shaped locally. Rental values, property supply and tenant demand can differ considerably between nearby areas, making local evidence important when assessing an investment.
An experienced letting agent can provide insight into achievable rent, which properties are attracting interest and how easily a home may let. This gives landlords stronger evidence to work from before committing to a purchase.
Building a buy-to-let strategy for change
A changing regulatory landscape makes strong buy-to-let fundamentals increasingly important. Landlords need to balance returns with rising costs, compliance and ongoing responsibilities. Martin & Co can provide local insight and property management expertise to help you assess your investment options.
