Finances and business planning
Optimise your rental property's financial performance with strategic business planning and financial management
As a landlord, you are running a rental property business, which means – just like any other business - you have to:
Carefully track your income and expenditure
Understand your tax obligations
Budget ahead – for the next five, 10 and even 15 years
Set money aside from your rental income each month for maintenance, repairs, upgrades and tax
Monitor your profits and returns (KPIs) so you can track the success of your investment
Property tax can be particularly complicated, so it’s sensible to take advice from an accountant and/or property tax expert to make sure you’re operating as efficiently as possible and not paying any more tax than necessary.
You could use the services of a professional bookkeeper, but there are also very good landlord software options that can help you manage both the property and your finances.
As an individual landlord, you have to complete self-assessment tax returns, and you need to be aware of the upcoming Making Tax Digital changes that will require you to submit quarterly returns to HMRC via MTD compatible software if you have a property income of:
• more than £50,000 - from 6 April 2026
• between £30,000 and £50,000 - from April 2027
For much more detailed information and guidance, see our separate guide to UK landlord tax.
Monthly
Quarterly
Annually
As is clear from this guide, being a self-managing landlord requires time, knowledge and skill, and it’s neither easy nor straightforward – particularly if you’re new to it.
So you need to think about who could take over from you and keep things on track while you’re away on holiday or if something happens to you and you’re not able to carry on working.
The first thing to ensure is that all your paperwork and systems are properly recorded and filed (see the first section of this guide) so that someone taking over can easily access everything they need to manage your property or portfolio.
The next thing to consider is who is able to do the job in your absence.
Ideally, if you’re not managing your rental yourself, it should be put in the hands of a professional agent – and that’s what we’d suggest you do if you’re going to be out of action for a while.
However, agents won’t do holiday cover, so one option is to pay another landlord to take over from you. If there’s a local landlord association, that’s the ideal place to network and find one or two other people that you can ‘buddy up’ with and provide cover for each other over holidays, etc.
However, you must make sure they are qualified, trustworthy and that you have an agreement to protect you should things go wrong.
Otherwise, if you’re only going to be away for a short time, you could ask a friend or family member to be on standby.
Just make sure your tenants know you’ll be away and give them the contact details of whoever you’re leaving in charge in case there’s an emergency.
Not everyone has the time, skill or inclination to handle everything required to be a successful self-managing landlord.
Among other things, you’ve got to:
Live fairly local to your rental property
Know about and understand all the regulations that apply to the private rented sector, and stay up to date with changes
Have the time and ability to deal with tenants’ queries and any problems that crop up during the tenancy
Be able to handle ongoing general property and financial administration
Build a network of reliable, suitably-qualified contractors that you can call on to deal with maintenance and repair issues
So, if you:
Work full time
Have a stressful job
Have children
Want to completely relax in the evenings and at weekends
Get annoyed or irritated when things go wrong
Aren’t very good at attention to detail when it comes to paperwork
…then it’s probably better to have a professional agent.
One common reason for landlords wanting to manage themselves is the perceived cost of paying an agent.
It usually amounts to somewhere between 12% and 20% of the monthly rental income, which may sound a lot, but it still leaves you with 80% to 88% of the rent.
Considering the time, hassle, worry and expense that a qualified agent can save you, it’s generally well worth the investment to make sure your property is always legally let and professionally managed – and remember that their fee is tax deductible!
For more information and advice, head to our ultimate landlord guide to choosing a letting agent.
If you have any questions or would like to discuss landlord insurance with one of our experts, please contact the Total Landlord team on0800 63 43 880 or email enquiries@totallandlordinsurance.co.uk
