How many properties do you need to become a full-time landlord?
Many landlords invest with the goal of retiring early – being able to quit their ‘day job’ and support themselves through income from a property portfolio
How many properties you need to ‘retire’ will depend on how much you currently earn and how much you will need to live the lifestyle you want.
The average buy to let property costs around £260,000 and generates about £1,200 a month in rent, according to Zoopla (April 2024).
A 75% interest-only mortgage at 4.2% (fixed for two years) equates to a repayment of around £683 a month.
Add another £200 for maintenance, insurance and a five per cent annual void allowance, and that’s roughly £880 in costs, giving a £320 monthly positive cashflow, £3,840 pre-tax profit a year.
Source: Buy to Let Fixed Rate Mortgages
That profit figure can be increased if you invest in HMOs (multiple occupancy properties), which is what many portfolio landlords do.
Although they require more work to operate, the fact that successful HMOs can generate two or more times the monthly income of single-let properties makes them a popular choice, particularly for self-managing landlords.
Find out more about investing in HMOs in our ultimate guide to letting an HMO property.
So, if you invest in single lets, you might need ten or more properties to replace your salary, while if you invest in HMOs, you may be able to leave your day job with just four or five.
As with building any kind of investment portfolio, it’s important to talk through your plans and the risks associated with them with a qualified financial adviser, who can help make sure they are realistic and achievable.