Buy-to-let tips: The 8 things that can kill your buy-to-let investment

3 min Read Published: 21 Jun 2023

buy-to-let tipsInvesting in buy-to-let property appears on the surface as a 'sure-fire' bet. Surely property prices are always going up, there are plenty of people wanting rental properties and you can leverage your investment by using a buy-to-let mortgage? However, reality can be quite different from this rosy picture, as I explain in detail in our podcast on "Navigating the Buy-to-Let market".

In this article, I take you through the 8 things that can kill your buy-to-let investment and provide tips on how to avoid them.

1) House prices crash

Now you may think that house prices are always going up but that is not always the case. After strong growth in the property market in previous years, fuelled by stamp-duty holidays and mortgage guarantee schemes, house prices are stalling and with interest rates rising and no sign of the cost of living crisis abating, a correction is a possibility. Falling house prices are a problem for anybody looking to realise their buy-to-let investment in the short term or looking to remortgage a property to raise capital for further investment.

Buy-to-let tip - A buy-to-let investment should be a long term investment where a short term dip in house prices will not be so devastating.

2) Rising interest rates

If you are relying on a mortgage to help finance your buy-to-let investment, then a rise in interest rates can seriously affect your finances. At the present time rising interest rates are making it increasingly difficult for would-be first-time landlords, especially as buy-to-let mortgage rates are typically higher than ordinary residential mortgage rates.

Buy-to-let tip - Try to limit the amount of mortgage you need and fix your mortgage so that you know your outgoings in advance.

3) Ongoing expenses

Any returns on a buy-to-let investment can be seriously impacted by the running expenses of your investment. Costs such as insurance, letting-agent fees, repairs and refurbishments can slowly drain away any profit if not carefully managed.

Buy-to-let tip - Before you start investing in buy-to-let property make sure you budget for all the outgoings so that you can clearly understand the full costs involved.

4) Rental voids

At the moment there is a good demand for rental properties but you will have to be very fortunate not to experience void periods. These periods when you have no rent-paying tenants can stretch on for weeks, or longer, especially if you have repairs to carry out before the property is fit for rent.

Buy-to-let tip - Make sure you check out any prospective tenant fully and treat them well once they move in to maximise the chances of them staying long term.

5) Not complying with landlord legislation

There are some regulations that all landlords have to comply with when they let a property to tenants. Failure to comply with these regulations could result in a hefty fine or in severe cases imprisonment which will have a massive impact on your buy-to-let investment.

Buy-to-let tip - Read this guide to your rights and responsibilities provided by

6) Tenant damage

Unfortunately, not every tenant will treat your property the way you would like. There are some real horror stories about tenant behaviour from mindless damage to cannabis farms resulting in hefty repair bills for the landlord.

Buy-to-let tip - Vetting all tenants carefully will not necessarily solve the problem completely but it will certainly reduce the risk.

7) Non-paying tenants

If you have a tenant that is not paying their rent then you can have them evicted. To protect all parties there is a legal process to follow which can a number of weeks. During this processing time the tenant will be allowed to stay in the property - probably causing damage and still not paying the rent.

Buy-to-let tip - Take out rent-guarantee insurance that will pay out if your tenant doesn't pay up

8) Neighbourhood issues

Unfortunately, some areas, where there is a high number of low-rent properties, can attract the wrong type of tenant. These areas can quickly become undesirable, making the properties harder to let and almost impossible to sell. Stories are rife where investors have bought in a respectable area only to see their investment fall in value as the area slowly declines.

Buy-to-let tip - Think carefully about the areas in which you are going to invest. Just because the property is cheap doesn't mean you should buy; think about the long term.

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