What are the key costs for landlords?
As you may already be well aware, there are many and various costs associated with being a landlord and you need to know and keep track of them all. Whether it’s a periodical/one-off expense or a regular monthly outgoing, you should make sure that (a) you know what the costs are so you can budget properly and (b) the price you’re paying is reasonable and you’re getting value for money.
Here are some of the key costs to know:
Ongoing maintenance and repairs
This is one of your biggest cost areas and probably the hardest to predict accurately as properties and trades costs can vary dramatically.
As a rule of thumb, if you set aside around 1% of the property’s value each year, you should always have enough in your maintenance fund to cover the cost of works. So, if your property’s worth £250,000, budget for an average of around £200 a month over time.
The average lifespan of a boiler is 10-15 years. Although they can last longer, you’re probably going to have to buy one, possibly two per property in your time as a landlord, depending on how long you’re planning to invest for.
According to Checkatrade, the average cost for the supply and installation of a combi boiler is £2,400 + VAT. For a system boiler with a hot water tank in an airing cupboard, it’s £200-£400 more and for a conventional boiler that has an additional cold water tank in the loft, it’s around £400 less.
Professional cleaning between lets
It’s important to ensure your rental has a ‘deep clean’ between tenancies, so you can be confident each tenant is moving into a property that’s as fresh as possible. The average price is around £300, with studios and 1-beds starting at around £200. If you have a four or five-bedroomed property, be prepared to pay up to £500.
Health & Safety checks
There are some checks which are legally required, for example:-
- Gas Safety check: this must be done annually by a Gas Safe registered engineer and could cost between £60 and £90. If a company is offering it for much less than that, be careful, as they may charge extra for each appliance.
- Electrical Installation Condition Report: although different rules apply in different countries, in England from April 1st 2021, every 5 years you must have all the fixed electrical installations checked by a suitably qualified contractor. It could cost around £200 for a property with between 1-4 bedrooms, but the price tends to depend on the number of circuits. Electricians will commonly give a discount for multiple reports so, if you have several properties, it’s probably worth having them all checked at the same time.
- Energy Performance Certificate: an assessment and certification is required every 10 years and could cost between £70 and £100, depending on the size of the property.
In all cases where you’re engaging a contractor, make sure you get a quote in advance, including VAT, and try to agree a fixed price and if you need help carrying out any maintenance or safety checks on your property, do get in touch.