9 Costs You As A Landlord Need To Know About

9 Costs You As A Landlord Need To Know About

• Posted by Luscombe & Co in blog, Tips & Advice
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If you’re a property investor, you know how profitable it can be. But there are also certain costs involved in owning a property.

Here’s a list of the costs that you as a current or prospective landlord should know about before investing in your first or next property in Newport:

1. Regulations

   1. Since April 2018 any property offered for rent must have an Energy Performance Certificate (EPC) with a rating of at least an E before a tenant can be put in the property.

2. Safety

   1. There are certain safety regulations a house must comply with. If not, a landlord can be fined up to £5,000.

   2. A smoke alarm must be placed on each storey of a property and in working order

   3. A carbon monoxide alarm must be installed in each room where solid fuel is used. Landlords are also encouraged to install these in rooms which contain gas appliances.

   4. A yearly gas safety check needs to be carried out each year by an approved engineer. The gas safety certificate needs to be given to the tenants within 28 days of its completion.

   5. All of the above need to be tested before each new tenancy.

3. Mortgage Interest

   1. In the past, landlords could deduct the cost of their mortgage interest from their personal tax rate. This is being phased out and by 2021, landlords will only be able to deduct the finance at the basic rate of tax, meaning higher tax bills.

4. Repairs and Maintenance

   1. Research found that the average cost of repairs and maintenance of a house to be around £700 per year. This can obviously be much higher if things like boilers break or windows need replacing for example.

5. Insurance

   1. Your property is probably the biggest asset you own, so you obviously want to protect it if the worst happens.

   2. Landlords’ building insurance will protect you from damages caused by fire, flood and also loss of rental income while repairs are being made.

   3. Property owners’ liability insurance will cover injury to a tenant while in the property or any damage to a tenant’s property caused by a water leak for example.

   4. Contents’ insurance is also something to consider, especially you’re renting out a fully furnished property as you’ll be at a higher risk of theft and damage to the property.

6. Finding a Tenant

   1. Many agents will charge between 60% and 100% of the first month’s rent to find a tenant for your property. MAke sure you aware of the fees that will be charged.

7. Legal Costs

   1. If worse comes to worse and you have to remove or evict a tenant, your legal fees can run up quite substantially.

8. Arrears

   1. Hopefully you have reliable tenants who pay their rent on time. But you might lose out on rental income if your tenants miss rent payments.

9. Time

   1. Time is money. If you only have one property, you can expect to spend quite a few hours each month dealing with your tenant’s queries, repairs and admin. If you have a larger property portfolio, you can expect to spend much more time on the above.

Whether you do business with us or not, you need to ask yourself if you have adequate knowledge of the above or if you need a professional to guide you.

If you have any questions or just want to chat about your property, we’re here to help. Phone us on 01633 265222.