The actual cost of being a Landlord depends on what is outlined in the tenancy agreement. However, there are a number of mandatory costs that landlords may be responsible for.
Tax on rental income – It is worth noting that any profiting from rental income after paying interest on a mortgage is liable for income tax as it counts towards capital gain tax (CGT). This cost will depend on personal circumstances and the frequency is yearly.
Tenancy deposit scheme – Any deposit taken from a tenant will need to be held and moderated by a licensed body. This service will normally incur a cost of £100 or thereabout and the frequency is annually and on a per new tenant basis.
Gas Safety certificate - There is a legal requirement that all gas appliances that are provided with in the property by a landlord must be inspected annually by a Council for Registered Gas installers ( CORGI). This will normally incur a cost of £80 or thereabout.
Energy efficiency certificate - The certificate will give each building a SAP (Standard Assessment Procedure) rating, and this will equate to an energy rating from A to G. To procure this certificate will cost approximately £60 and the frequency is every 10 years.
Landlord Insurance – It is imperative for landlords to have house insurance on the property they are letting. This will provide cover against fire, damage to the property as well as public liability schedule. This means in the event of any liability arising as a result of an accident on the landlord’s property the landlord is covered.
Furniture – The landlord will be responsible for replacing or mending any appliances, unless damages were caused by tenant. The cost involved is dependent on circumstances and the frequency is every time something breaks.
Bills – The tenancy agreement might stipulate the landlord will be responsible for paying all bills, including council tax, electricity, gas and water. The cost will depend on the tenancy agreement.
Letting agent’s costs - Well this undoubtedly is the biggest expenditure of all. A letting agent can charge 10% of annual rental income for simply finding a tenant and then a renewal fee each year on top of that. For a full-management program, they could charge as much as 15%. This is excessive and more the reason why you should be using Zone4homes.com to advertise your property.