In our property investment seminars, people often want to know about the costs involved with being a landlord. It’s a pertinent question, and one that should be considered seriously before you start searching for buy-to-let property for sale – especially if you want to make a good profit.
Investing in UK property is one of the most lucrative, reliable forms of investment, but of course, it comes with a price tag. If you’re unable to attend one of our property seminars in person, here’s some more information about what you’ll have to pay out for as a landlord.
Property Investment in the UK – Costs
- Capital gains tax. It’s surprising how many new investors forget to factor tax into their financial projections! Like any money-making activity, your work as a landlord is taxable. Expect to pay 20%, or 40% if you fall into the higher earning bracket.
- Mortgage fees. This expenditure depends on how you’re planning to purchase your buy-to-let property for sale – obviously, if you’re funding the sale from your personal savings, it doesn’t apply. However, if you’re using a specialist buy-to-let mortgage, expect to pay interest, plus mortgage lender fees.
- Improvement and maintenance. Unless you’re buying a new-build, it’s likely your property will require some form of improvement – and it’ll certainly require maintenance over the years. Work out how much it’ll cost to bring the house to standard before you commit to buy.
- Insurance cover. You’ll probably need specialist landlord insurance, which covers a variety of things, including legal costs. It’s also wise to invest in buildings insurance.
- Safety aspects. As a landlord, it’s your responsibility to ensure your tenants are in a healthy, safe environment. It’s mandatory to get an annual Gas Safety Certificate, and you must also supply smoke and carbon monoxide alarms. All furniture must comply with fire safety regulations too.
- Getting tenants. Whether you hire a letting agent or market your property yourself, it’ll still cost money to do so. The only exception to this is if you purchase a buy-to-let with tenants in situ.
- Untenanted periods. If you purchase in the right area, you shouldn’t experience too many occasions where your property is left empty. However, it can happen, and you should factor this into your financial projections. Make sure you can still cover mortgage costs etc. if the worst should happen.
Is it Worth It?
As many landlords in the UK can testify, it certainly is worth investing in UK property – providing you understand the market and know the costs involved. If you’re feeling daunted by the prospect, remember that there is plenty of support and guidance available. Fellow landlords are often willing to offer their professional advice, as are property investment agents, who can also help you find the right property for your requirements. It also helps to read up on the current market. Start browsing through industry publications online, or attend a property investment seminar. In short, it all helps.
The Buy2Let Shop Limited
The Buy2Let Shop are a team of specialist property investment agents, and it’s our job to help you find the right investment property in the UK, at the ideal price. We’ve got in-depth knowledge of the market, so we’re well positioned to assist with all aspects of your purchase, and we also offer help with buying a house at auction. For more information, visit The Buy2Let Shop website today.