Rent for a property
If the claimant owns a home other than the one they live in
, any rent received from it is treated as capital - and increases its capital value - rather than as income.
Universal Credit Reg 72 (3). "Where a person's capital is treated as yielding income, any actual income derived from that capital, for example rental, interest or dividends, is to be treated as part of the person's capital from the day it is due to be paid to the person. " And no expenses involved in renting out the property are disregarded - see FOI 3933
Renting out a property as a business?
If a claimant runs a business their capital assets are disregarded and any income from the business (for example rent from a tenant) will be treated as self-employed earnings.
However it is very unlikely that renting out just one property would be classed as a business. Over the years there have been a few appeal cases involving rented property and the general approach is that renting property can be a business (and so the assets can be disregarded as capital) if it involves enough work to keep them occupied, which in turn means almost certainly more than just one property.
RM v Sefton Council (HB)  UKUT 357 (AAC):  AACR is a HB case but will be persuasive on UC - Judge Jacobs held that receiving rent and carrying out landlord duties in respect of a single dwelling did not constitute carrying out a business as a self-employed person and so the value of the property could not be disregarded as a business asset.
A useful rule of thumb is to ask: how much work would it take to own that property as an empty building or flat? There would be insurance, Council Tax, occasional checks on things like wiring and heating perhaps; and how much more work is involved if they have tenants in the property? The difference is likely to be marginal and is only going to mount up to something that would be a business if they are having to do that marginal extra work multiple times for multiple properties. There might be circumstances in which a single building can be a business - perhaps an HMO with a lot of rooms and rapid turnover with high maintenance tenants who need a lot of management. But just having a flat with a tenant who minds his/her own business and pays his/her rent regularly, would not constitute working as a landlord as a business.