A Guide for Wembley Landlords on the Costs of Letting a Property
In this three-minute read, we outline the costs and expenses landlords encounter when letting a property.
To succeed as a landlord, you need to have a realistic idea about the costs you'll encounter when letting out a property.
Many people think that being a landlord is child's play; they assume that once the tenant has the keys, the only thing left to do is collect the rent each month.
But the truth is, letting a property comes with an array of grown-up financial and legal responsibilities. If you're not on top of your obligations, you could lose money or wind up in court (or both).
Here's a list of all the costs that are part and parcel of being a landlord in Wembley.
Mortgage repayments
Mortgage repayments are the most significant monthly outgoing for most landlords. If you're looking for certainty about the size of your monthly repayments, opt for a fixed-term rate.
Insurance costs
Landlord insurance is a condition of most buy-to-let mortgages. You can opt for a general policy (this should cover property liability, buildings insurance, contents, and loss of rent) or one that is more far-reaching (but will have higher premiums).
Maintenance and repairs
All properties require general maintenance from time to time. Landlords must ensure the property is safe (that means keeping up to date with things like gas and electricity safety checks) and in good condition. Set aside funds to cover this and any repairs that may crop up (property experts suggest between 5% and 10% of annual rent).
Service charges and other fees
If your property is in an apartment block, you may need to pay a service charge or ground rent. Leasehold property owners may also have to contribute to the cost of work carried out in communal areas.
Covering vacant periods
Even the most optimistic and diligent landlord should be prepared for a property to be empty for a short period between tenancies. It's also possible that a tenant could fall behind on the rent. Set aside at least six weeks’ rent to cover yourself.
Tax
The rules around what you can and can't claim as a landlord have tightened in recent years. To ensure you pay what you should, and claim that to which you're entitled, do your research and keep all relevant receipts and paperwork.
Finding a tenant and credit checks
Some DIY landlords do these things themselves, but most good landlords leave it to the pros and use an experienced letting agent. The DIY route will save you a few quid upfront – but it could cost you much more in the long run (think of the legal bills if it all goes wrong). A good letting agent will have years of experience at sourcing good tenants, checking references, and spotting trouble in advance.
Property management fees
A letting agent will handle the big and little stuff for you: the paperwork, the people management, the legal checks, the inspections, and disputes. As a landlord, you could do this for yourself. It will save you some money but cost you in terms of time and energy.
Here at Grey and Co., we can take the stress out of managing a rental property, so you can sleep easy at night. Get in touch if you have any questions, we're here to answer your queries.
Copyright 2020 Grey and Co.
Abigail and the team Grey & Co.