Are you thinking of becoming a landlord in Cambridge? If you’re new to the buy-to-let market and property investment read on for our financial advice to make sure you aren’t caught on the hop. You should always keep a reserve of money for…
- Repairs: If something goes wrong or breaks, in some cases it’s up to you to pay for the repairs. e.g. costs for a plumber to fix a leak, or to replace a broken appliance. Do keep all receipts for repairs you’ve paid for, as these could be tax deductible.
- Mortgage repayments: If you don’t own your property outright, you’ll still need to pay your mortgage even if you aren’t getting rental income.
- Bringing your property up to standard: You’ll need to spend a bit of money to make sure it’s up to code. Includes fire safety precautions, electrical upgrades & more. There are extra compliances to consider if it’s going to be a ‘House in Multiple Occupation’. Legislation does change so you have to keep abreast of laws pertaining to rental properties.
- Refurbishment costs: e.g. painting and decorating. You may need to refresh the decor between renters.
- Agency fees: letting an agency handle your property means you don’t have to be ‘on-call’ for tenants. It also reduces some of the admin work. The typical charge is 10-15% of the rent, another cost to consider.
- Furniture: If you’ve decided to rent your property as ‘furnished’, you need to ensure sofas are fire resistant (and have the fire safety label attached). You’ll also need budget to replace furniture that becomes damaged or unsafe as a result of wear and tear.
- Insurance: tenants usually take on the responsibility for most monthly bills like gas and electricity but you are responsible for sorting out (and paying for) buildings insurance.
- Energy performance certificate: costs between £50 – £100 and is a legal requirement if you’re renting or selling a property. It lasts 10 years, so you don’t need to renew it for every tenancy.
- Membership of a Landlord Association: an optional consideration. They charge anywhere from £50 to £184 per year, depending on which one you choose and which level of membership you go for.
- Solicitors’ fees: it’s a good idea to get your tenancy agreement looked over by a legal professional to ensure it’s watertight. If you join a landlord association, you’ll may have access to solicitor-approved tenancy agreements.
Our team of advisors have decades of experience sourcing and managing buy-to-let mortgages. Whether this is your first or 50th property investment we have the skills and expertise to guide you through your purchase.