One in 20 Brits are renting out a property to top up their income, earning an extra £678 a month on average.
After paying off the mortgage, property management fees and maintenance costs, landlords are left with a pre-tax profit of 40% on average, research from LV= has found.
Landlords in London receive the highest rents, at £1,079 on average, with those in the South East following just behind at £816 a month.
LV= found more people are becoming 'part-time landlords' – who don't rely solely on rent as their main source of income - after moving to a new home while keeping hold of their old one.
More than half (55%) of landlords said they never intended to rent out a property. Some 15% said they ended up becoming a landlord because they wanted a bigger property and 10% had to move for work. Meanwhile, 6% ended up renting out a property because they moved in with a partner and didn't want to, or were unable, to sell their own home.
Despite the benefits of renting out property, there is also a downside. Nearly a third (32%) of landlords have experiences damage to their property, resulting in repair bills of £1,200 on average. Damage was mostly caused directly by tenants (44%), flooding (17%) and storms (8%).
Maintenance can also be difficult to stay on top of and LV= found that more than a quarter (27%) of landlords have not had a gas safety check in the past year, despite being legally required to do so and risking prosecution and fines of up to £20,000 in the process.
Cover your costs
John O'Roarke, managing director of LV= landlord insurance, said: "Renting out a property can be a great way to cover your costs if you are unable to sell or want to hold on to a home and make some extra money from it, but it is not without risk.
"Landlords not only need cover for any damage to their property but they also need to think about their tenants and how they will house them if the property becomes uninhabitable, as well as the lost rental income. If you are thinking of renting out a property you should check the current regulations for letting properties in your area and make sure you have the right cover in place."