Budgeting for new landlords

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Planning on becoming a landlord? Then you need our essential budgeting tips!

One of the most frequent questions new landlords ask is, “what will I have to pay to get my property ready for tenants to move in?”. This is an essential part of budgeting and it makes good sense to look at all of the outgoings to ensure no possible expenditure has been overlooked.

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 on the whole most landlords would encounter the following expenditure.

1. Set up costs

The mandatory costs at the initial 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: 1 functioning smoke alarm in every room that is frequently used by tenants for general daytime living purposes (lounge); 1 functioning smoke alarm in every circulation space, such as hallways and landings; 1 heat alarm in every kitchen. All alarms should be interlinked.
  • Legionella Risk Assessment

You can find more information on these in our Legal Responsibilities section.

There may be additional costs to consider in order for you to maximise the rent including pre tenancy 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
  • Management charges
  • 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.

Call us now on 0131 253 2847.