How to avoid unexpected bills when letting property

Whether you’re a first time landlord with a single flat for rent in Southend or an experienced property investor with an impressive portfolio of houses to let, there will always be unavoidable expenses associated with owning rental property.

Marcus James, Lettings Agent at Pace, has created a list of common costs to help landlords budget more successfully and avoid over-estimating financial returns.

The buy-to-let market is currently a serious consideration for budding investors. As a local Lettings Agent in Southend on Sea, we are regularly approached by people looking to generate an income and good level of capital growth from rental property. This is truer than ever, now that changes in pension regulations allow alternative financial plans for retirement. However, running a successful property portfolio takes continued investments of time and money on top of the initial financial outlay.

Buy-to-let can be very profitable in the long term but only if you look at the figures in detail and structure your investment wisely. A serious property investor will approach becoming a landlord as a business venture. Creating a business plan, cash-flow forecast and taking professional advice will all help to avoid costly mistakes or unexpected bills. The maintenance costs for a new or recently refurbished property are likely to be lower at first but over time, those costs will grow, particularly when larger-scale refurbishment is required.

Rented homes can often face more “wear and tear” than those that are owner occupied. Tenants sometimes take less care which may result in the need for redecoration every three to five years. Landlords need to be aware of this and ensure funds are available for kitchens, bathrooms and boilers to be replaced every 5 to 15 years. New windows, external doors, guttering, driveways, and radiators could be needed every 15 to 25 years which could mean considerable expense. General maintenance, rewiring and roofing projects could also be necessary at any time.

Unforeseen expenses can also include tenant arrears; the impact of having a vacant property and unexpected maintenance charges. If you’re unaware of or unprepared for these costs they can mount up and sometimes make a significant dent in your rental income. Make sure you’re ready when contingency funds are required for the ongoing costs of maintaining your buy-to-let property in Southend-on-Sea.

Checklist of costs to consider before buying-to-let

  1. Energy Performance Certificate
  2. Gas safety certificate
  3. Tenancy Deposit Scheme fees
  4. Assured Shorthold Tenancy fees
  5. Landlord insurance
  6. Council tax and ground rent
  7. Service charge
  8. Buildings insurance
  9. Utility bills
  10. White goods and furnishings
  11. General maintenance and repairs
  12. Void periods
  13. Letting agency fees

We are happy to offer half an hour of face-to-face advice, free of charge, to local individuals considering becoming a landlord.

Please telephone and ask to speak to George, Marcus or Crystal on 01702 445 606.

Marcus James is Lettings Manager at Pace, an independent Southend on Sea Letting Agent. He deals with every aspect of the property letting process, providing expert and candid advice together with tailor-made marketing plans for each property he lists for rental.

Marcus prides himself on ensuring our landlord clients get the best return in the right timeframe for their investments by conducting rental appraisals, letting viewings and oversees the running of the lettings department.