You may think being a landlord is pretty easy financially. Afterall, the rent will come in month after month which will cover the costs and a little more. However, there are a few outgoings for landlords in Peterborough that you need to be aware of. Some of these are monthly costs, others are one-off costs – all of which are worth being aware of.
Your rental income should cover the majority of your costs. However, it is important to have a contingency budget. This will help you if things go wrong. For example, there may be repairs that you need to pay for, or the property may be empty between tenancies. Below we have listed some of the costs of being a landlord in Peterborough so you can ensure you’re prepared.
- Repairs
If something breaks in the property, you may need to pay to get it fixed. This could be a broken shower, faulty boiler or the replacement of a faulty appliance for example. Think about what is included in your rented property and what it would cost you to repair or replace these things for your tenants. When you repair or replace anything in the property, make sure you keep the receipts. These could all be tax deductible.
- Mortgage Repayments
If you don’t own the property outright, there will be mortgage repayments that you will need to make. Think about how much the mortgage repayments are. This will help you ensure the tenants rent covers this monthly cost for you. Take your time to look at mortgage tax relief as this is set to change in the next few years.
- Insurance
Your tenants will pay for the monthly gas, water and electric bills. They will also have insurance for their possessions. However, you will need landlords’ insurance for the property. This is a legal requirement and something that will be another outgoing cost for you, as a landlord in Peterborough.
- Agency Fees
An agency, like the team here at AGT Property Management and Lettings, will take away a lot of the stress of being a landlord. However, this comes at a cost. Many landlords feel this cost is worthwhile as they are able to focus on their lives while their rental property is being looked after. However, it is a charge that you need to remember when looking at the costs of being a landlord in Peterborough.
- Solicitors Fees
When you first start out as a landlord, we recommend you get your tenancy agreement looked at by a professional, if you’re not using an agency. This will ensure that your contract is water-tight if there were to be any issues in the future. However, it is an extra cost you need to consider.
- Modernisation
You will need to pay money to modernise your property. However, there will also be things you need to do to bring your property up to standard for it to be rented. For example, fire safety precautions and electrical upgrades. If the property will become a HMO there are other standards the property will need to meet. Some of these can be seen in our previous blog, or you can call us directly with any questions you have.
There are other costs to being a landlord in Peterborough that you may want to consider. For example, if you want to offer a furnished property, there will be a cost to the furniture. That said, a furnished property can be offered at a higher rate than an unfurnished property. You may also consider becoming a membership of a Landlords Association for the benefits that can offer.
If you are thinking about becoming a landlord in Peterborough but want to know more about the costs involved, please call us directly.
01733 748031
