Budgeting for new landlords
Planning on becoming a landlord? Then check out our advice regarding budgeting tips. It makes good sense to look at all the outgoings to ensure no possible expenditure has been overlooked.
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Landlord expenditure can be divided in to two sections:
1. Set up costs
2. Ongoing costs
These costs will vary from landlord to landlord and from property to property, but overall most landlords would encounter the following expenditure.
1.Set up costs
The mandatory costs at the inital set up stage refer to your legal obligations and include;
- Energy Performance Certificate (EPC)
- Gas Safety Certificate
- Portable Appliance Test (PAT) - tests all plug in appliances which will be provided by the landlord as part of the tenancy (this includes fridge and washing machine)
- Electrical Installation Condition Report (EICR)- this tests wiring and sockets in the property
- Smoke detector system including functioning smoke alarms in every room that is frequently used by tenants for general daytime living purposes, functioning smoke alarms in every circulation space such as hallways and landings and a heat alarm in the kitchen. All alarms should be mains wired and interlinked.
There may be additional costs to consider in order for you to maximise the rent including pre-tenacy cleaning, redecoration, and provision of new carpets, etc.
2. Ongoing costs
The ongoing costs are related to the management of the property and include:
- Mortgage fees
- Landlord Insurance
- Maintenance costs
- Tax charges
- Safety certificates renewal
Once you have an idea of all costs associated in becoming a landlord, you can determine the viability of the investment.
At ESPC Lettings, we will talk you through your budgets and arrange the necessary certificates on your behalf. We will also manage outgoings during a tenancy to ensure that all expenditure is necessary and monitored effectively.