All The Running Costs Of Being A Landlord

All The Running Costs Of Being A Landlord.

As a landlord in Hammersmith or anywhere else, we know that you’re in it to make money. When we treat it like a hobby, it pays us like a hobby. When we treat it like a business, it pays us like a business. And with any business, the accounting side is vitally important. If you don’t know your income and expenditure, then you’ve never going to know whether you can turn a profit until it’s too late.

The costs for a landlord have increased over the past few decades, going from an industry with little regulation to one that its regulated at every turn. And with that regulation comes expense. It is still perfectly possible to make good money from being a landlord here in Hammersmith as well as it is anywhere else in the country. But we suggest you understand what costs are out there and what that means for you. Landlord taxation can be a complex subject to get to grips with. We’re here to help you do just that. Let’s take a look at what you need to know.

Property Licencing

Depending on the location of the property, you may need to be registered as a landlord in order to be, and continue to be, a landlord. The idea behind this is to have a point of contact and to manage the standard of living accommodation. These licenses have to be renewed every 5 years and start at around £500 a go depending on which Borough you are in.

EICR Certificates

This is a fairly new one, so if you’ve been a landlord for a while, listen up! Since July 2020, it is now the law to have an Electrical Installation Condition Report or EICR. A qualified and registered electrician will check and issue the certificate and these costs around £199, again renewed every 5 years.

Gas Certificates

As with the electricity, the gas in a rental property must be deemed safe for people to live in. This is an annual check, a legal requirement and a bill of around £50. It confirms that all the gas appliances in the property are in good, safe, working order.

Interest Rate Relief on Mortgages

Now, this used to be one of the benefits of being a landlord. But as of late 2020, you don’t get any tax relief on your mortgage interest. The interest you pay on a Buy To let or BTL mortgage no longer counts as an expense. And the cost of your mortgage will vary on a case-by-case basis.


An Energy Performance Certificate or EPC sits alongside the electrical and gas checks. Again, this is a legal requirement and indicates how energy efficient a property is, as well as indicating areas for potential improvement. Each certificate lasts for 10 years and the cost is around £70.

Smoke Carbon Monoxide Alarms

Another safety element – and another legal requirement in England. This isn’t a massive expense, but it is something that can save lives. A two-floor home will need two smoke alarm plus a single carbon monoxide alarm. Altogether the bill should come in around £70 – more if you need someone to install for you.

Income Tax

Like any other business, tax has to be paid on profits. For most landlords, this comes in the form of income tax. So, if you’re a basic rate taxpayer then your bill will be 20% of you profits, 40% if you’re a higher rate taxpayer.

Letting Agent Fees

Getting a call at three o’clock in the morning to deal with a burst pipe is no fun at all. That’s why many landlords opt for having their properties managed by a letting agent. These fees are around 15% of the monthly rental. For that fee, you get rent collection, arrears chasing, managing the property and carrying out any repairs.

Landlord Insurance

You want your property to be insured in case the worst happens. Strangely, this isn’t a legal requirement. But in our eyes, it should be. Many lenders will need to see this in order to release the cash. Check out the options to find the right one for you.

Tenant Acquisition

There are costs associated with finding a tenant, whether you try to do this privately or use the professional experience of a letting’s agent. The actual costs vary from property to property, so it is impossible to put a price here – but there aren’t many landlords who don’t have some kind of cost here.

Void Periods

This can be quite a painful cost, that is difficult to budget for. If you don’t have a tenant, then you have many of the above costs but not the income to pay them with. Managing any repairs and minimising the gap between one tenant moving out and the next moving in are useful tools here.

ICO Registration

If you take and process data, then you will need to be registered with the ICO under the Data Protection Act. It costs £430 a year and can save a massive headache later down the line.

Being A Landlord In Hammersmith We know from representing our landlords over a number of years that understanding what is required is more than half the battle. That’s why we’re here. Hammersmith landlords come to us because we spend the time keeping up with the changes in regulation that go with being a landlord. And regulation never eases – it only gets tougher. Drop us a line if you have any questions, or if your dreams of being a landlord – is turning into a nightmare.

Written by John Rigg

Source London Estates

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