The Costs You May Not Be Aware Of When Dealing With Property Management
As a landlord, you will have a number of responsibilities in regard to managing your property for a tenant. However, if not properly checked, the costs can run high and you risk being charged more than what you’re bringing in financially.
So, before getting started with renting a property, look at your financials and decide how much you can afford to spend on a property, including all the little costs you may not have thought of such as certificate checks and insurance.
One of the main costs associated with property management is with letting agent fees. Of course, this depends on if you’re planning on using a letting service or if you plan on being an independent landlord.
Even as a private landlord, you still have to take upon the fees of marketing and managing your property. In general, there are two types of letting services, basic and full.
With the basic service, your lettings agent will cover the finding and handling of all advertising and applicants, as well as handling credit checks.
The full service covers everything in the basic model, but also manages the property for you. They will handle collecting the money to pass onto you, and general day-to-day management with your tenant in regards to repairs and issues.
Safety Checks And Legal Checks
Something that can often be easily forgotten about, is the running costs of keeping your property in working order for your tenants. When tenants are moved in, you’re not responsible for every little maintenance job, but overall, you will be responsible for the safety of the building.
Legally, you’ll be required to carry out yearly safety checks on gas and electrical appliances. As well as providing smoke detectors and carbon monoxide detectors. These little checks and installations can be small costs, but be aware of doing all of them at once.
Before letting any tenant come into your home, you have to ensure you have an energy performance certificate in place. These EPC documents are a legal requirement that you need to have sorted before listing your property on the rental market.
They can cost anywhere usually from £50-£100, but it’s best to check around your area as some places may charge more.
Traditionally, one of these expensive places is London, but there are options. The cost of an EPC with epcHome has a fixed price of only £55, carrying out services in all the London boroughs and outskirt areas.
When it comes to letting, it’s highly recommended you take out some landlord insurance, as well as general home insurance policies.
This specialised insurance, usually includes both building insurance and contents insurance. The building coverage protects the structure itself financially from damage from flooding or fires.
With contents insurance, this will protect everything within your building that has been put in place for your tenants. You can get additions to your policy that will help cover loss of rent, cost of repairing damage and liability cover.