Can you still make money from Buy to Let?

A landlord asked us this week: "If I buy a £100,000 three bed, what should I actually budget each year, and will it pay its way?" Good news. We've worked it through line by line, mortgage included, and it does.

A £100,000 three bed renting at £750 a month brings in £9,000 a year. After every cost of running it, including the mortgage, £2,992 is left, £249 a month, before tax. The property pays for itself, and then pays you.

The annual budget

Assuming a £75,000 interest only mortgage (75% loan to value) at 5.3%, in line with the current market average for a two year fix:

The mortgage works hard for you

Your biggest cost is also your biggest advantage. Borrowing £75,000 means £25,000 of your own money controls a £100,000 asset, and interest only keeps your monthly cost to £331. Against that £25,000 deposit, the £2,992 left each year is a return of just under 12%, before tax.

Compliance is small, predictable and deductible

A gas safety certificate every year, an electrical report every five years, an EPC every ten, plus insurance, comes to roughly £283 a year combined. That's a small, fixed price for a safe, fully legal property, and it's all deductible against your rental income.

Maintenance and voids are already in the budget

Setting aside around 1% of the property's value each year for repairs is a common rule of thumb, and a full month empty between tenants costs £750 in lost rent. A quiet year with fewer repairs and no gap between tenants simply leaves more in your pocket.

And then there's growth

ONS figures put North East rents up 6.3% in the latest year, the highest of any English region. If your rent rose by the same, that's an extra £567 a year, with your fixed mortgage payment staying the same.

North East average house prices also rose around 14.7% over the five years to May 2026. A £100,000 property growing by the same would be worth around £114,700, and with an interest only loan of £75,000 unchanged, your £25,000 deposit would have grown to around £39,700 of equity. That's a gain of around 59% on your initial deposit, just under 10% a year, before buying costs and tax. Past growth is no guarantee of the future, but it shows what the region has delivered.

The bottom line

A £100,000 three bed in the North East can pay its own way, with room to spare, when you budget correctly. Keeping repairs under control is easier with the right team behind you. Our own in-house team of 10 to 20 tradespeople handles maintenance for the landlords we manage for, at competitive prices.

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