As a landlord, what are my mandatory costs?

As a first-time landlord or trying to keep up with the ever-changing legislation, we dig into the costs that are involved of being a landlord, from day 1 of preparing a tenant to move in, to running the tenancy year by year. Some of these costs are also useful to check when looking to purchase your first buy to let property, to save you extra expenditure in the long run!

Getting your property ready!

Legal Property Certifications – All required by law for rental properties.

1. EICR Certificate – To be renewed every 5 years. Every property will require an electrical certificate, these range from £80-90 on average, however, additional expense may be incurred should your property require remedial works, to ensure the electrics pass the checks.

2. Gas Safety Certificate – To be carried out Annually. This applies to all properties with a Gas Supply, these range around £70-80, could be more depending how many gas appliances are in the property, with possible additional costs should there be any issues with the system/boiler. Always advisable to check before purchasing a property.

3. Energy Performance Cert (EPC) – To be carried out every 10 years, or ideally if any significant changes are made that could affect your EPC rating, this is a legal requirement to list a property for rent or for sale. The property must have an E rating as a minimum, anything lower than E is not compliant, you need to aim as close to the A rating as possible, which will make your property more appealing to potential tenants.

4. Smoke & Carbon Alarms – All properties must have as a minimum 1 smoke alarm on each floor, a heat alarm in the kitchen, and a carbon alarm in any room used as living accommodation which contains a fixed combustion appliance. This is any appliance that uses fuel but excludes gas cookers. Cost of alarm installation will vary on the size of the property.

Other Important Costs

1. Building Insurance – Your tenants will be liable to have a contents policy in place, however as a landlord the building cover is your responsibility, costs will vary on the type of property.

2. Mortgage Repayments – If the property has a mortgage, it will be the landlord’s responsibility to make sure payments are made.

3. Maintenance – Throughout the tenancy, repairs may be required such as roofing repairs, plumbing, window repairs and so forth, these will fall to the landlord to repair and maintain. However general cleaning and gardening maintenance will fall to the tenant to maintain. Costs will vary depending on the age and condition of the property.

4. Ground Rent & Service Charge – The responsibility of who pays service charge and ground rent varies, it will be the tenant’s obligation to pay if they have signed an agreement that states service charges and ground rent are included in the property. However, a landlord should organise the charges and ensure they aren't overcharging a tenant or there could be legal ramifications as a result. Sometimes landlords will decide to pay the service charge themselves and factor this into the rent to cover the cost. Other landlords prefer to split the costs between themselves and the tenant.

5. Finding Tenants – Letting Agent Fees if you decide to go down this route, they will do the hard work for you! Advertise, find tenants, run credit checks, guide you through the process. Be aware that many insurers won’t cover you if you accept tenants with poor credit history.

6. Inventory – This may be organised for you with your chosen letting agent, to ensure a record is made to note the condition before and after tenancy. Costs on this vary on size of property, this will be a vital piece of evidence should your property not be returned in an acceptable condition.

7. Presentation – As we have mentioned above, it is vital that the property is legally complaint with legislation, but making sure it is up to visual standard Is important too. Give the property a fresh coat of paint in a neutral colour, and make sure it is deep cleaned, from the windows to carpets and everything in between. The better the house is to start with, the more likely your tenants will look after it and want to stay long

After our discovery call, you can choose the level of support they need so the costs vary. For example if you would like a more hands-free experience, our Full Management Package includes inspections and Maintenance & Repairs.

term, and the best rental agreement you can secure for your property.