What Costs Will you Incur Once the Property has Been Purchased?
Ok, so you’ve bought your first property, now what kind of ongoing property costs are you likely to incur throughout the year.
Unfortunately, the Tenant doesn’t pay everything, so we have to budget for the following costs over the course of the year:
There will always be maintenance costs of some sort with all properties, whether it’s exterior, interior or just general repairs and replacement to white goods or furnishings. Generally speaking, Landlords are responsible for maintenance, wear & tear and ensuring the property is in a lettable condition.
2) Service Charges
Usually only applicable with leasehold properties where fees are payable to the block management company for the up-keep of the communal areas.
3) Ground Rent
Again, usually only payable with leasehold properties and this is the annual fee payable to the freeholder of the property.
If you have a leasehold property, often, the buildings are insured by the freeholder or block Management Company, however if your property is freehold, then buildings insurance is essential. We also advise Landlords to also take out contents insurance, although not a legal requirement, it does often include public liability, which is favourable when renting.
5) Utility Charges
Whilst Tenants will usually pay the utilities, Landlords are responsible for utilities charges when the property is empty. If the property is leasehold, sometimes the water rates are charged as part of the management fees – so worth bearing this in mind!
6) Council Tax
Again, usually paid by the Tenants; however this is the Landlords responsibility when the property is empty. If the property is unfurnished, then in most cases the council will issue exemption certificates for up to 6 months in a rolling year.
7) Lettings Costs
If you use a Letting Agent, then the Lettings Costs need to be considered – this will vary from Agent to Agent, but generally there will be charges for managing the property as well as find a tenant, registering the deposit and ancillary costs such as inventories and check-outs etc.
If you have gas in the property, then you will need an annual Landlords Gas Safety Inspection – prices vary, but range from £60 – £80 – this is a legal requirement for all properties with gas.
A legal requirement for properties that are either on the market for sale or rental, but an EPC lasts for 10 years, costs vary but usually around £69.00
Dependent on the type of property, but often HMO properties do need a license to operate and usually a fee is payable to the local council for this. Landlords should note that it is a criminal offence to operate a HMO property without the correct license. In many areas, this also includes Student Houses.