Tuesday 09 May 2023
You should now know, from our financial mini-series the real cost to buying an investment property & how to finance your first property investment. The finale of this series is the real cost to managing a property investment.
It’s important to know the costs as these are all factors that will affect your bottom line:
➤ Landlord insurance: As a landlord, you'll need to have landlord insurance to protect your property. The level of insurance varies greatly & some of the most comprehensive insurance covers lost rental income as well as everything else! This can be a significant expense, and it's important to shop around for the best deal.
➤ Gas safety & electrical checks: New legal requirements means that a properties electrics & gas must be checked by registered professionals prior to a tenant moving in. This can cost upwards of £150.
➤ Property management fees: If you don't plan to manage the property yourself, you'll need to hire a property management company. These companies typically charge a fee of 8-12% of the monthly rent, which can add up over time.
➤ Property taxes: As a property owner, you'll be responsible for paying property taxes. This can vary depending on the structure your properties are in.
➤ Maintenance and repairs: As a landlord, you'll be responsible for maintaining the property and making any necessary repairs. It's important to budget for these expenses, as they can add up over time. A general rule of thumb is to put away 10% of the monthly rent, every month, as a buffer pot of money.
➤ Service charges and ground rent: If you're buying a leasehold property, you'll need to pay service charges as there are communal areas in the building they need to be up-kept & sometimes ground rent.
Did you account for all the costs above?
To learn more, read all of the financial series blog posts on our website.
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Contact us today to discuss our UK property hotspots and find a property suited to your needs and budget!
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