The costs of being a landlord
As a landlord, it's essential to have a thorough awareness of the costs connected with being a landlord, so you can set up your finances accordingly. If you're a prospective landlord or one of the many "accidental" landlords who was thrown into the deep end (head first), it may either seem like it’s smooth sailing or that you’re going into a rabbit hole of just spending, which will be discussed further down.
The truth is that after doing the math, being a landlord might not even seem possible. Yes, that may be awful, but it's a better option than continuing with a strategy that is illogical.
Unfortunately, a lot of people entered the world of landlord ship blindly, and this has been a major contributing factor to many failures. Being a landlord involves a lot of unplanned expenses.
EPC (Energy Performance Certificate)
A legal requirement is an EPC. It's an evaluation of your home's energy efficiency.
An official certificate from the landlord is required before any viewings may be conducted. An EPC is only good for ten years, so you only need to pay for one every ten, but you can renew it if you make major changes to the property's energy efficiency and want those changes to be reflected in the report.
Cost (approx.)- £65 every 10 years
Electrical Safety Inspection/Report (England Only)
Since July 2020, landlords in England have been required by law to obtain an "Electrical Installation Condition Report" (EICR) to ensure that local electrical safety regulations are followed. At least every five years, the report must be updated.
Cost (approx.)- £199 every 5 years
Gas Safety Certificate
A legal duty for landlords is to do an annual gas safety inspection.
A Gas Safe qualified engineer must inspect all gas fixtures and appliances. If everything is secure and functional at the conclusion of the inspection, you will be awarded a certificate.
Cost (approx.)- £45 per year
Like ANY other for-profit company, landlords must pay taxes.
Any profit you make will often be included in the landlord's income tax, such as Basic rate taxpayers pay 20% whereas higher rate taxpayers pay 40% in taxes.
Cost (approx.)- Varies per case
Smoke & Carbon Monoxide alarms
Smoke and carbon monoxide alarms must be provided and installed by all landlords in England. Fortunately, it's a quite reasonable and affordable need, so everything is OK.
Cost (approx.)- The average house will need 2 smoke alarms (one per floor) and 1 Carbon Monoxide alarm, which should cost about £30 for all 3.