A Costly Feat

Maintaining a buy to let investment property can be a costly exercise, and investors need to take that cost into account.

Buy to let can be a tricky business if you don’t tackle it properly and there are a whole host of costs that can trip up the amateur investor. From the more obvious additional three per cent stamp duty tax, to various other tax implications, void periods, mortgage costs, agency fees, the cost of finding a tenant, and more.

The industry rule of thumb to maintain a buy to let property is around one per cent the property value annually, but this cost of maintaining can obviously vary across the country.

Across the UK landlords should be tucking away an annual budget of £2,344 to cover repairs and maintenance, with this rising to £4,746 in London, with the North East home to the lowest repair costs at just £1,328.

Of course, markets with higher rent returns may seem promising from an investment standpoint but the higher the reward, the higher the cost when things do go wrong. In Kensington and Chelsea, this annual one per cent saving climbs to an eye-watering £12,292, hitting nearly £9,000 in both the Cities of London and Westminster.

Outside of London, South Bucks and Elmbridge are home to the most expensive buy to let maintaining costs at £6,091 and £6,019 respectively.

Head to the likes of Burnley or Blaenau Gwent however, and this yearly cost of maintaining a buy to let property drops to less than £1,000 a year.

Founder and CEO of Howsy, Calum Brannan, commented: ‘The buy to let sector can be a minefield for the amateur investor and now more than ever, it’s imperative that you do everything you can to maximise the return on your investment.

‘While technology now allows a greater level of control and service when managing your investment at a lower cost via online platforms, it isn’t just about the financial side of things. Providing a fit for purpose property is not only a legal requirement but essential to ensure a happy tenancy and a reduction in void periods.

‘Of course, things can go wrong and having the budget available to fix them is a must. In the worst-case scenarios, a cash pot equal to one per cent of your property’s value might not be sufficient, but it should cover you for most eventualities and is a good benchmark to start on.’

https://residentiallandlord.com/the-cost-of-maintaining-a-buy-to-let-property/