Is this a good buy-to-let investment?

Other costs

There are a number of other ongoing expenses faced by landlords. Some sort of allowance shoudl be made for these when weighing up potential investment properties.

Gas safety

A gas safety inspection is required at least every 12 months. Costs vary according to area and number of gas appliances in the property. Expect to pay approximately £100.

Energy Performance Certificate

An Energy Performace Certificate (EPC) is required before you are even allowed to advertise or show prospective tenants the property. This will need to be renewed at least every 10 years. Costs will depend on area and size of property but expect to pay up to £100.

Ground Rent

Leasehold properties are expected to pay a ground rent to the landlord each year. Details will be given in the lease.

Landlord registration

Depending on the area and type of property landlords may have to register with the council. Primarily this is for Homes of Multiple Occupation (HMOs) but in some areas has been extended to landlords of other types of properties.

Insurance

There are various types of insurance available to landlords.

Building insurance is usually a condition of the mortgage if the property is bought with a mortgage. But even if bought entirely from savings, building insurance is strongly recommended.

Contents insurance is available. However many landlords choose to self-insure, or to take out minimal cover.

There are all sorts of other insurances availabel to landlords - including public liability insurance, tenant rent insurance, legal insurance.

Accountancy fees

Being a landlord means that you are running a business. As a result you will be expected to complete as self-assessment tax form. If you don't want to do this yourself then you will have to pay an accountant to do it for you.

When it all goes wrong

No matter how careful you are with tenant selection you will occasionally get bad tenants. This can potentially result in several months with no rent, a ruined property and a hefty legal bill.

Your own costs

Even if you use a letting agent to manage the property for you there will be a cost to you in terms of time and effort as well as a real costs in terms of phone calls and stationary.

If you manage it yourself then you will also have all the advertising fees, petrol for attending viewings and sorting out maintenance issues as well as a lot more time and effort invested.