Keep on top of your rental property profits with an income and expenses spreadsheet. Speak to a qualified mortgage advisor before purchasing an investment property to make sure you get the best mortgage product for your property. Your mortgage payments will likely be the biggest ongoing rental property expense. It can be useful to keep track of your monthly and annual property management costs in an income and expenses spreadsheet. Management feesĭepending on how busy you are and how involved you want to be in the management of your rental property, full management can cost you anywhere between 10% and 20% plus VAT. The full cost of finding a tenant for your property could be as much as one month’s rent, depending on the letting agent. The cost of finding and referencing a tenant will depend on whether you do it yourself, or whether you pay a letting agent to do it. When calculating your buy-to-let costs, it’s easy to forget the cost of letting and re-letting your property. Sites like Zoopla and Rightmove will charge more than this, so make sure to do your research before signing up. Sites like SpareRoom and OpenRent charge a fixed fee for four weeks of advertising, and it’s usually around £30.
If you opt to let your property or room yourself, then you’ll need to pay to advertise. If the upgrade increases the value of the property, or increases the rent that you can charge for it, then it will probably be worth it. It’s important to note that upgrades and improvements are not generally (rental property) allowable expenses, so you should carefully consider whether spending the money will be worth the return. If you need to upgrade a bathroom or kitchen, replace carpets or laminate, or carry out any other improvements to your property, this also needs to be accounted for in your total rental property expenses. Landlords should consider keeping track of both general and emergency maintenance costs using a income and expenditure template spreadsheet. Emergency call-outs from plumbers, electricians and heating engineers will be more costly than regular maintenance.
Emergency repairsĮmergency repairs also need to be accounted for when it comes to calculating or forecasting your total buy-to-let expenses. These are all examples of rental property allowable expenses as these expenses exist ‘wholly and exclusively for the purposes of renting out the property’.
This includes any necessary maintenance that isn’t an emergency, for example non-urgent repairs to paintwork, units or appliances, cleaning and gardening. One of the most unpredictable rental property expenses is ongoing maintenance.
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