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Monthly Archives: May 2017

How Much Does It Cost A Landlord To Operate An Investment Property?

A landlord has many potential costs associated with renting out an investment property such as maintenance expenses. This month, Kent Reliance For Intermediaries has published a report called “The Finance of Investing: Tracking landlords’ costs and economic contributions” that landlords may find of interest – a copy of which can be viewed on their website but, below, we highlight some of the data. The average cost of operating an investment property excluding mortgage repayments is £3,632 per annum with this equating to 34% of the average rental income. This is a sizeable increase in what it cost back in 2007 when it cost an average of £2,918 per annum. The areas and annual amounts spent making up the figure of £3,632 were: – Ground Rent £62, Insurance £181, Servicing, maintenance and Property upkeep £1,025, Service Charges £312, Licensing Fees £41, Other £198, Utilities £170, Letting Agents fees £870, Voids £652 and Legal/accountancy £121. As you can see, maintenance costs make up the biggest expense followed by fees to letting agents. Mortgage repayments have not been included in the above figures but, if they had been, it is quite possible that they would have been the biggest amount of expenditure in…

Landlords Reaction Should Letting Agents Increase Their Fees

A survey has revealed that a large percentage of landlords would continue to use the service of a letting agent even if the agent increased his or her fees due to a ban on tenant’s charges. This research was carried out by the UK Association of Letting Agents (UKALA). The research revealed that a mere 9% of landlords felt that they would depart company with their letting agent. 7% of landlords were uncertain if they would remain with their letting agent. Also, 9% of landlords felt that they would agree to pay additional fees. It is interesting that 13% of landlords would try to negotiate terms with the tenants. 22% of landlords would try to get a better package by shopping around. Interestingly, 40% of landlords felt that they would charge their tenants more in rent to compensate for the additional expense they would incur. Letting agents will no doubt have to decide what they will do i.e. leave the fee that they charge landlords unchanged or increase it. It will be interesting to see how landlords react to any rise in fees. Will it be comparable to the results of the research mentioned above? No doubt letting agents provide…

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