If you're a landlord, or thinking about becoming one, you may be wondering: 'Is being a landlord worth it in 2024?'

It's undoubtedly a time of uncertainty for landlords across the UK. The new Labour government promised to 'overhaul' the regulation of the private sector in their election manifesto, but it's not yet fully clear what this will mean for landlords.

That said, the benefits of being a landlord remain as appealing as ever. Landlords can expect a good return on investment in the long run and demand for rental properties remains high, not to mention the number of landlord pre-tenancy resources that are available to make the process as smooth as possible for both new and existing landlords.

Ultimately, whether being a landlord is still worth it in 2024 depends completely on your own unique circumstances. In this guide, we outline the main pros and cons of being a landlord in 2024 to help you make an informed decision.

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Pros of being a landlord in 2024

Let's start with the good stuff. There are still many benefits of being a landlord in 2024, the most obvious being income, demand, and security.

Good long-term return on investment

The main reason anyone becomes a landlord is to earn additional income. In 2024, landlords can still expect a good return on investment, but higher mortgage interest rates mean you'll have to be in it for the long haul to make a decent profit.

If you're a new landlord, it's important to remember that becoming a landlord is not a get-rich-quick scheme. It may take some time before you see a significant return on investment, but it's certainly worth it for the long-term results.
 

High demand for rental properties

The demand for rental properties remains extremely high, with new data showing that an extra 120,000 rental homes are needed to meet this demand.

This is great news if you're a landlord or thinking about becoming a landlord for the first time. It means your property is likely to be occupied right away and won't remain vacant for long periods of time.
 

Long-term security

Renting a property comes with a range of long-term benefits for landlords. Not only does it provide an ongoing source of income that could be saved as a pension or for use in an emergency, it also provides a long-term asset for the security of your family.

Cons of being a landlord in 2024

Although being a landlord is still worth it for many reasons, there are of course some drawbacks that you'll want to consider.

Uncertainty around reform of the private rental sector

Landlords are in a period of change and uncertainty at the moment. Rental reform is imminent, including the abolition of Section 21, but the exact scope and timings of the changes are not yet clear.

The new Labour government has outlined their plans for a new Renters' Rights Bill, which in addition to removing Section 21, will introduce new and reformed possession grounds, a private rented sector database and ombudsman, and a Decent Homes Standard.

The Renters' Rights Bill has not yet been published and will need to be debated in Parliament before it becomes law - so these changes will not be happening immediately.

The NRLA is campaigning to ensure the Government’s plans to reform the private rented sector are fair and workable for both landlords and tenants. Find out more by visiting our rental reform campaign page.

Expenses

Being a landlord is profitable for most in the long run, but there are still a number of expenses that landlords incur. These include:

• Tax on rental income
• Buy-to-let mortgage
• Tenancy deposit scheme
• Gas safety certificate
• Energy efficiency certificate
• Electrical installation condition report
• Repairs and maintenance
• Landlord insurance
• Furniture and decoration
• Letting agency fees (if you choose to use one)

Some of these expenses are tax deductible, but not all.

You also have to consider what would happen if a tenant caused damage to your property and you were forced to spend money on repairs or pursuing legal action. This is highly unlikely to happen if you've conducted thorough tenant referencing checks, but it's still best to be prepared for the worst-case scenario.

The NRLA offers members a wide range of landlord services to mitigate the risks associated with becoming a landlord and help keep your expenses to a minimum.

So, is it worth being a landlord in 2024?

‘With the Renters’ Rights Bill on the horizon – as well as new energy efficiency requirements – a lot will be changing when it comes to the private rented sector,’ says Meera Chindooroy, the NRLA’s Deputy Director of Campaigns and Policy.

‘At the same time, an average of 15 applicants for each rental property advertised means demand is double pre-pandemic levels. Responsible and well-informed landlords who provide decent homes to rent will find a market eager to embrace them.’

There are still more pros to being a landlord than there are cons, and if you become a member of the NRLA, you’ll have unlimited access to our team of advisors who will help keep you profitable.

However, whether being a landlord is worth it for you will ultimately depend on your circumstances.

If you're already a landlord, think about why you became a landlord in the first place and whether your objectives are still being met. It may be helpful to consult with a trusted advisor, such as an accountant, to review the figures before making a final decision.

If you're thinking about becoming a landlord, make sure to do your research on the area you're planning on investing in, as yields can vary from region to region. Calculate the income you need after accounting for all expenses to work out whether the investment will be worthwhile for you, making sure you've also set funds aside for unforeseen expenses and taxes.

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We can help you manage your tenancy at every stage to make sure things run smoothly, ensuring you have nothing to worry about even during these uncertain times.

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