Buying Tenanted Properties in 2025: What You Need to Know

We don’t need to tell you that we are big fans of selling, and buying, tenanted properties, it’s not as if we make any secret of that!

However, as the private rented sector (PRS) faces increased regulation and the economy shows only the merest glimmers of growth, is buying tenanted properties still a viable investment strategy in 2025?

With many years of experience in the PRS, and specialist knowledge of buying and selling properties with tenants in situ, we’re ideally placed to look at the market and offer an educated opinion on the viability of buying tenanted properties in 2025.

The advantages, and possible disadvantages, of buying tenanted properties

We’ll try and keep this relatively brief, as it’s a subject we have covered before. Jump into your time machine and head back to 2020 when we wrote ‘What are the Benefits of Buying Tenanted Property?‘ to recap.

Since then we’ve covered the various up and downsides of this strategy, and during the intervening years, both the regulatory and legislative landscape have changed.

Our intention therefore is to examine whether or not the changes in the past five years, and the changes we know are coming, have significantly affected this strategy.

Advantages

The advantages of buying a tenanted property haven’t changed significantly.

You’ll still get rental income from day one, you’ll have a fully compliant rental property and you shouldn’t have to worry about significant capital expenditure on the property.

Speaking for ourselves, we still charge no fees for the buyer – those are the seller’s responsibility, which is good for you! You’ll also know the rental income you can expect is before signing on the dotted line.

The process of buying tenanted property, especially when handled by specialists in the field, is surprisingly straightforward and more often than not you’ll be dealing with a fixed price and no stresses such as closing dates or blind bidding.

In short, it’s an all-together more business-like matter.

Possible downsides

When speaking about potential pitfalls to buying tenanted properties, it’s often a case of highlighting areas where mistakes can be made, rather than issues inherent to the investment.

Again we have covered a number of these in previous pieces such as, ‘5  Mistakes to Avoid When  Buying Tenanted Property‘. Oddly enough (or perhaps not) mistaken assumptions play a significant role here…

Failures like not properly understanding what you are buying, or not grasping the importance of regulation as it applies to landlords feature highly here.

Likewise assuming that the tenancy was properly drafted by the previous owner and that there were no issues with the sitting tenants can, occasionally, bite you unexpectedly.

This is why having knowledgeable professionals on your side is invaluable, whether it be estate agents like ourselves, solicitors or accountants.

Yes, the process can be relatively simple, but having someone to remind you of what really matters and requires your attention, if you’re new to property investment, is worth its weight in gold.

Changes since 2020

Since we referenced one of our pieces dating back to 2020, what changes have we seen since then, and do they affect the viability of buying tenanted properties?

Well… There was the small matter of a global pandemic which caused all sorts of issues, the invasion of Ukraine with a fairly widespread impact on the global economy, the infamous mini-budget of 2022 and Labour’s landslide in 2024.

The effects of most of these events have faded however Labour’s massive majority in the House of Commons means that they can drive through legislation as they see fit.

Accordingly, landlords south of the border will have to deal with the Renters Rights Bill in due course, and north of Gretna, where the Scottish Government holds sway, the Housing Scotland Bill is making its way through parliament.

There has been some talk regarding the effect that these Bills will have when they finally reach the Statute books, but currently we stand by the conclusions we drew earlier this year in ‘Legislative Changes to the PRS in 2025…‘

Rents in Scotland continue to rise according to the Scottish Government’s statistics, and interest rates are slowly falling as the Bank of England sees some reasons for optimism in the UK economy.

Property prices overall, while still rising, are more stable than they were over the past few years and like any business sector, the PRS benefits from a stable economy.

The ESPC reports that, in their view, the rental market in Scotland is healthy and is finally more closely aligned with the pre-pandemic market. They note that time-to-rent has increased slightly, suggesting less pressure on the market.

Advice from the property pros

The short answer to our question – is buying tenanted properties in 2025 a viable investment – is yes. So, thank you for read… You’d like a longer explanation? Fair enough!

Like the broader economy, the buy-to-let market has seen many ups and downs over the past few years. Happily we’re seeing a return to a greater degree of stability which makes planning investments somewhat easier.

As far as regulation is concerned, we are going to see some distinct changes both north and south of the border. At the risk of repeating ourselves, our view is that these changes do not in and of themselves seriously damage the market.

They will change the way business is done, especially in England, but they should not be sufficient reason to avoid investing in buy-to-let property. Buying tenanted property remains an excellent option.

If done properly and with due diligence it enables an investor, especially a new investor, to sidestep a number of the more common pitfalls which can be encountered when starting from scratch.

It’s cost-efficient and should mitigate a number of potential outlays which would otherwise occur when buying a property and preparing it for the market. It also guarantees rental income from the earliest possible moment.

In summary…

Although the PRS has seen some notable highs and lows over the past few years, it is hopefully heading into calmer waters. Further regulation will come and we will all have to assimilate that, but the economy is looking fairly settled.

The demand for good rental properties is still there, if lacking the lunacy of recent times, and rental incomes continue to rise, as do property values.

If you’re considering buying tenanted properties in 2025 and would welcome the chance to fully discuss the pros and cons, please get in touch. This is what we do, and we pride ourselves that we are rather good at it!

Thank you for reading and hopefully this has been of use to you.

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]