If you’re a property investor considering buying a place to let, you are probably thinking about the returns you may get and the yield potential (a measure of profitability). With a 36% jump in rents since 2020*, it’s easy to see why. The UK's average monthly rent continues to rise, and so do the opportunities for profitable returns on your property investment.
Being aware of all the costs involved in being a landlord is essential for successful financial planning. Stay ahead of the game by thoroughly researching and accounting for all expenses to maximise your rental income potential. If you’re still unsure,
speak to your local agent.
Here’s a guide to the costs of being a landlord…
What costs may you pay as a landlord?
When thinking about rental property as an investment, these are the costs that you need to consider. We will take a deep dive into them below…
Mortgage payments
Typically, buy-to-let mortgages require a higher deposit than a mortgage for the property you intend to live in. To get a buy-to-let mortgage, you usually need a deposit of around 25%** of the property’s value, and it comes with different age limits and lending criteria.
Read our buy-to-let mortgage guide.
Property upkeep
From touching up with paint to fixing leaky taps, regular maintenance keeps your property looking good. But it’s not just those little tasks you need to think about; making sure your property is safe and habitable for your tenants is a legal necessity.
Safety certificates
These include, and are a non-negotiable, a gas safety certificate every year, an electrical safety certificate every five years, plus smoke and carbon monoxide alarms. Not having these is illegal. For further information on all the necessary compliance for a landlord,
please speak to your local agent.
Energy performance certificates (EPCs)
Landlords face several costs when it comes to Energy Performance Certificates (EPCs). There's the initial expense of the EPC survey itself, but the potentially bigger financial commitment comes from making necessary improvements to meet upcoming standards.
The improvement costs can vary depending on your property's current condition and what needs upgrading. This might include adding insulation, replacing windows, or installing a new boiler.
While these expenses can be substantial, it's worth noting that various grants and tax deductions may be available to help offset some of these costs, making the investment more manageable for property owners.
Insurance
The costs vary depending on your property's location, size, and what you are including. We offer landlord's insurance as a service; you can read more
here.
HMO Licence
If you are letting a property to multiple separate households, you might need one of these.*** Fees and licensing vary by council, so please check with your local council.
Marketing costs
Finding the right tenants isn’t easy, and ensuring your property is positioned correctly to be found comes at a cost. Our marketing-only landlord service can ensure maximum visibility. Find out more
here.
Who pays landlords’ legal costs?
If you end up in a legal dispute (say, with a tenant over unpaid rent or damage), you’ll usually have to pay your own legal costs upfront. However, if the court rules in your favour, you might be able to claim some or all of those costs back from the other party. Luckily for you, we offer rent and legal protection insurance.
Do landlords pay tax on rent?
Any rental income you receive may be subject to income tax. You can deduct certain allowable expenses (like letting agent fees, repairs, and insurance) before working out your taxable profit, so make sure you keep good records and file your tax return on time.
For more information on buy-to-let properties,
read our 2025 market update,
What does a landlord need to do before a tenant moves in?
Before your tenants move in, you will need to sort:
Tenancy agreements
These crucial documents protect your rights. We also offer a tenancy administration fee, which includes marketing of the property, arranging and conducting viewings, negotiating tenancy terms, arranging completion of tenancy documents, and utility and services management.
Right to rent checks
This is a legal requirement in England to ensure the tenants have a right to live in the UK before renting out your property to them.
Inventories
An independent inventory details everything in the property and its condition. You will need this made at the start, checked when tenants move in, and checked again when they leave. It is your protection if there are damage disputes.
Our letting service options
We can take on all the aspects of legal compliance and property management to help you stay safe and legal and maximise your financial returns. With our full management service, you get full peace of mind with 24-hour repair reporting, compliance support, rent collection and more. We can tailor our letting services to your needs.
Speak to your local agent to find out more.
You can learn more about our landlord services packages by clicking
here.
