Typical BTL Landlord Expenses

michaels

I have the opportunity to purchase a property for 133k. I will pay using money raised against equity in my home so the borrowing cost will be fixed for 3 years at about 4.5%

I have been advised by the local letting agents that I could expect a gross rental of between 950 and 1050 furnished (15% fee charged by the agent to be subtracted from this)

Could someone who does btl please advise the typical level of other expenses to be budgeted for eg depreciation, tenancy gaps, legal costs, safety inspections, wear and tear, insurance...what else do I need to think about?

GDB2222

michaels wrote:

I have the opportunity to purchase a property for 133k. I will pay using money raised against equity in my home so the borrowing cost will be fixed for 3 years at about 4.5%

I have been advised by the local letting agents that I could expect a gross rental of between 950 and 1050 furnished (15% fee charged by the agent to be subtracted from this)

Could someone who does btl please advise the typical level of other expenses to be budgeted for eg depreciation, tenancy gaps, legal costs, safety inspections, wear and tear, insurance...what else do I need to think about?

Your costs will depend on the type of property this is. Can you give more details?

Is this ex-local authority? I ask because the rental of 1000 pm sounds quite high compared to the value of the property - nearly 10%.

I work on the basis that expenses, voids, etc, will eat at least one-third of rental. That includes estate agent's fees, but excludes mortgage payments.

On several of my ex-LA flats, the service charges this year will be 150% of rent received. This is because of refurbishments, where the LA is extraordinarily expensive.

michaels

Thanks for your response.

Yes, ex la but have similar rental quotes from a couple of agents (3 double bed + garden property, ground and first floor of 4 storey block in London close to good transport). Service charges from LA are about 300pa with additional 1500 total improvement expenditure estimated in next 5 years (luckily LA have just completed kitchen, bathroom and plumbing refurb). Am having structural survey done today to confirm no nasty surprises.
So on rental of 12k pa non-interest costs of 4k would be typical in your opinion?