babygiraff86 I live in the north east - mirtgage is 500 a month. Next door neighbour rents - exact same house, pays 700 a month. Shows the profit margin really, even here in the north!!
That would depend on the size of the mortgage of course.
Say it did cost exactly the same as yours. Before you even get to that stage, would have come an outlay for decorating and buying furniture most likely (and obviously a sizeable deposit, legal costs on buying, stamp duty, etc.). Landlord registration, gas safety certificate, electrical safety certificate, EPC, (if its an HMO then obviously much more), preparation of lease and inventory, viewings. Say that uses up 2 months of that profit = £400. Deduct agency fee (15%? of the total plus the first month's rent = £510). So that's £910 of the potential annual £2400 profit gone already.
No-one is obviously adding up the landlord's time if there are any burst light bulbs minor things needing fixed, or the cost of more major repairs.
So from the £1500 left, deduct 10% for wear and tear (since mine is an HMO, I find my license fees and the costs of the latest change which can only be provided at great expense by one company mean that 10% is more like 25-30%) and you have £1350 or so left before tax. Now I pay tax at 40%, so that leaves me with £810. Not bad but not exactly rolling in it either! In reality, that £810 goes towards another £1500 or so buying nice stuff to keep it looking like a decent place to live in, decorating, new carpets and flooring, upgrading to nicer sinks and taps or kitchen units, etc.. I can't claim any of that in tax, only wear and tear. If I did run it as a proper business, as a limited company, I could do. (obviously if I did, at least I would immediately become a "professional and have a better understanding of the market, as Tondelayo suggests - the difficulty is in getting a commercial mortgage, although at higher interest rates, I would pay almost not tax at all as I would run at a bigger loss!)
I actually find it quite possible to run things at a loss most of the time, because costs have risen significantly since I started doing this (mainly due to government legislation, not tenants), and that doesn't really quantify my true "losses" or expenses, which come out of my own earnings. And obviously if you have a void with no tenants in, that means an even bigger loss and less tax! So its not all bad OP.
I'm not moaning about any of this, just pointing out that what you describe above is unlikely to be the actual profit margin. I see mine more as a pension, and pensions are tax deductible but a bit risky, property I see as less tax deductible, but also less risky. Who knows what the government are going to do next though, both with pension funds and property!