Demand for rental homes continues to outstrip supply in many parts of the UK, with the RICS predicting that rents will rise across the country by an average of 3% in the next 12 months. But if this is making you think that there’s money to be made in being a landlord, then you need to think carefully before you buy-to-let.
Mortgage and repair costs are a given, but what else will you need to dip into your wallet for? Home repairs and maintenance specialist Rightio have produced a useful guide for would-be landlords, pointing out some of the costs you may not have thought about.
Gas and electrical safety
First off, gas safety. With 77% of UK homes using gas central heating, there are a number of gas safety regulations to meet – and these carry a cost. Annual gas safety checks by a Gas Safe engineer are needed on each property you let, although landlord boiler insurance may help cover the cost. Cost to landlord – from £35-£90.
Electrical safety is also mandatory for landlords in England although checks are not required as often as gas safety checks – you only need to carry out an electrical safety exercise every five years. Cost to landlord - around £200.
Landlords must also put properties on the EPC register so they can provide tenants with energy efficiency ratings. These have to be renewed every 10 years, although landlords can proactively renew them if they make significant energy efficiency improvements to the property. Cost to landlord – from £60-£120.
Depending on the area you choose to buy in, some property owners will require a landlord licence. Because this only applies in certain situations, it can catch out a lot of new landlords or those expanding their portfolio – and can be costly. Also, if you rent out a house in multiple occupation (HMO) you will need a licence. More than 70 councils in England can apply selective licensing, which allows councils to run a fit and proper persons test on property owners. Cost to landlord – around £400 per let.
Insurance is something else that new landords may not have considered. Its not mandatory but it can cover a number of expenses associated with renting out your properties and could save you money in the long run. Most standard landlord insurance will cover the cost of damaged furniture, or if something like a fire, a flood or water leak damages your property. Cost to landlord – around £270 a year
In addition, you will also need to factor in the cost of using a letting agent to find you tenants if you decide to go down that route, as well as considering the tax implications. So becoming a landlord isn’t something you should enter into lightly without taking all these things into consideration.
At Ringley we can’t promise to cut the costs listed here but we can make your landlord journey easier, while at the same time ensuring you comply with all the many regulations that apply to rented homes. Our automated lettings platform PlanetRent does just that. It also gives you free access to the two most popular marketing platforms, Zoopla and Rightmove, and takes you quickly and easily through all the processes involved in signing up new tenants. The platform makes dealing with repairs straightforward and it even takes the pain out of deposits. So take a look today and see how PlanetRent could help you take the first step towards being a landlord.
Author : Maryanne Bowring
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