You might think that once you own a property and want to rent it out then all you have to do is find some tenants and start collecting rent. However, it is not as simple as this and there are many costs associated with being a landlord. Here are some additional items you will need to pay for.
If you are going to use an agency to rent your property out, they will charge you a fee for this. They often offer more than one level of service and fees can vary depending on which agency you are going to use. It is worth shopping around to make sure you get the best deal. Agencies will often charge you a monthly fee but then ask you to pay extra for any work or certificates you need to have.
It is possible to rent the property out yourself and avoid agency fees if you would prefer to.
When you have found a tenant, you should carry out a referencing check. This will cover things such as a credit check and may also include asking previous landlords and employers for personal references. The cost will depend on how in-depth you want these checks to be. Expect to pay around £25 per tenant to have their reference checks carried out.
Energy Performance Certificate
Before a tenant moves in you will need to make sure you have an up-to-date Energy Performance Certificate (EPC). The price may vary depending on the company you use to carry this out, but you can expect to pay approximately £34. This report will show how energy efficient a property is, and they need to be updated every ten years.
Gas Safety Certificate
This certificate has to be updated by a gas safety engineer every year to make sure that any gas appliances are safe to use. Prices can vary depending on the size of your property and how many gas appliances there are, but you should expect to pay between £30 and £50 for this.
An electrical check will make sure that the electrical installations in the property are safe. It is now mandatory to carry out these checks every five years. This means that you will need to have an inspection carried out by a certified professional and provide a copy of the report you receive to your tenants. Not having safe electrical appliances and installations in the property could cost you a lot of money in legal and repair fees if any damage is caused.
Landlord insurance covers you for the risks associated with letting out a residential property to tenants. It can cover buildings and contents insurance but can provide additional protection by covering you for personal liability insurance and loss of rent too.
You may not need to get both building and contents insurance. For example, if you are letting out an apartment, your ground rent fee may include buildings insurance. If you are renting out a part of your own home, then check to see if your existing cover is sufficient. You will not be expected to cover your tenant’s contents as they are responsible for this themselves. Check to see what you need before you buy. However, even if you don’t need building and contents cover, you will still need to consider the personal liability and loss of rent parts of landlord insurance.
The price of the cover will depend on what package best suits your requirements, so make sure you carry out a comparison check with a company such as Quotezone to make sure you are getting the best package for your needs. Quotezone compares the prices of all the leading providers and can offer some of the best deals on the market.
An inventory should be carried out on your property when the tenant moves in and when they move out. Comparing these two reports will then show you if your tenants have caused any damage that will need to be paid for from their initial deposit. You can carry out these checks yourself. However, it may be wiser to use an independent company that can act as an adjudicator if there is a dispute at the end of the tenancy. An independent company will list everything in the property as well as note the state of repair and take photos that can be used as evidence. The price of these will vary depending on the size of property you have but expect to pay between £100-£200 for each report typically.
All of these prices are approximations and can be subject to change. However, this should give you a general idea of the cost of being a landlord and some guidance as to what you need to pay for and how often.