Advice guide centre

Additional costs

As well as being able to cover any outstanding mortgage or loan repayments you might have, you will also need to ensure that your rental income adequately covers the additional costs that come with being a landlord.

While it’s easy to budget for any outgoings that happen regularly, such as insurance and service charges, planning for more unexpected costs can easily be forgotten. A little bit of forward planning here can go a long way, especially as you are ultimately responsible for these costs whether the property is occupied or not.

Common additional costs for landlords:

Insurance premiums

Premiums for buildings insurance vary by area, type and size of property but allow for between 2 and 3% of the rent. For furnished property allow between another 1 and 4% of the rent depending on the level of furnishing. As a professional landlord, it is also worth putting some public liability insurance in place.

Replacing fixtures and fittings

Allow for 10% of the rent each year to replace worn out fixtures, fittings and furnishings. Also, be prepared to re-decorate every few years.


Things break down and need to be maintained over time. You will need to allow a percentage of the rent to cover this. The type, age and condition of the property will obviously influence repairs and maintenance of the property, so this should be taken in to consideration when choosing your property to purchase.

Ground rent and service charges

If the property is leasehold, you’ll have to pay these charges which may also include a contribution to the buildings insurance.

Allow for empty periods

Don’t assume the property will always be occupied with a rent paying tenant. Budget for a month each year when the property is empty – ‘void periods’ in landlord jargon.

Letting agency fee

Fees vary but a good Rightmove agent could get you a higher rent than if you find a tenant privately – remember that they have more market expertise and a greater selection of tenants for you to choose from. Most letting agents will offer a variety of service levels, depending on your needs and requirements, ranging from simply a tenant find service to a fully managed service.

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