Additional Costs as a Landlord

In addition to covering any outstanding mortgage or loan repayments, landlords must be able to ensure that their rental income can adequately cover the additional costs that come with being a landlord.

While it is easier to budget for the regular outgoings, such as insurance and service charges, planning for the unexpected can easily be forgotten. A little bit of forward planning can go a long way, especially as you will be responsible for these costs whether the property is occupied or not.

In this week’s Top Tip Tuesday, we cover the typical additional costs that come from being a landlord.

Insurance premiums

Premiums for buildings insurance can vary by area, type and size of property but allow for between 2 and 3% of the rent. For a furnished property, you should try and allow for another 1 to 4% of the rent depending on the level of furnishing. As a professional landlord, it is also worth putting some public liability insurance in place too.

Replacing fixtures and fittings

You should allow for around 10% of the rent each year to replace worn out fixtures, fittings, and furnishings. You should also be prepared to redecorate every few years, to keep the property looking fresh for your tenants.

Maintenance

Things break down and need to be maintained over long periods of time. You will need to allow a percentage of the rent to cover this. The type, age, and condition of the property will definitely have an effect on the number of repairs and maintenance issues on the property, so this should be taken into consideration when choosing the property you want to purchase.

Ground rent and service charges

If the property is a leasehold, you will have to pay these charges which may also include a contribution to the building’s insurance.

Allow for empty periods

Do not assume that the property will always be occupied by a tenant who is paying rent. Budget for a month each year when the property is empty – ‘void periods’ in landlord jargon.

Letting agency fee

Fees vary between agents, and they mostly offer a variety of service levels too. This means that they can tailor their services depending on your needs and requirements, varying from a simple marketing service to a fully managed service.

At Boxall Brown & Jones, we provide a very competitive fee and offer a variety of services that can be based around your requirements as a landlord. In addition to having property experts within our team, we also have a large portfolio of contractors who can ensure any problems with your property are addressed right away – meaning that your property is always looked after, and your tenants are happy.

Why not get in touch with our agents today for a free no obligation chat on 01332 384438?

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