Costs and Fees Involved with Letting a Property
When it comes to letting a property, there are often many different fees involved before you can begin renting to tenants.
Letting agent fees
Our team provides a number of services that can make your life easier as a landlord. Most letting agents charge a fee that is typically worked out at a percentage of the rent per term.
Some of the services we can offer include assistance in marketing your property, introducing tenants, collecting rent, and managing emergency repairs.
Income tax and capital gains tax
Income tax is required to be paid according to the rental income. If your property has increased in price, when it comes to selling, the profit you make may be taxed with capital gains tax.
Maintenance fees
As a landlord, you are legally required to keep the property in the correct state, though of course, this costs money. Many maintenance fees can be deducted from your total tax, though you should seek assistance from an accountant.
Landlord insurance
Landlord insurance is usually categorised into 3 separate tiers:
Building insurance, which covers the structure of your property protecting it from fire and damage from flooding.
Contents insurance, which can still apply to landlords who are renting an unfurnished property.
Landlord liability insurance, this insurance covers landlords in the event of either a tenant or visitor being injured on the property and if the landlord is deemed the responsible party.
Energy Performance Certificates and Safety Certificates
As a landlord, you are required to provide a gas safety record to the tenant before the tenancy starts. This shows that your property meets all legal requirements.
You must also ensure that all electricity in the property is installed professionally and provide an Electrical Installation Condition Report (EICR) to your tenant before their tenancy begins.
Another certificate that must be kept up to date is the Energy Performance Certificate (EPC). EPCs are valid for 10 years and cost anywhere between £60 and £120.
Unpaid rent and contingency funds
In the event of unpaid rent, many landlords use contingency funds and rental protection policies to avoid a period of no income. A rental protection policy will insure you for rent arrears or the loss of potential rent due to damage caused by previous tenants which prevent you from letting your property to new tenants.
