Can you afford to become a landlord?

The costs include:

  • Switching from a residential to a buy-to-let mortgage - you are obliged to inform your lender if you intend to become a landlord or your buildings insurance may be invalidated. Some lenders will charge you a fee and may review your interest rate.
  • Tax on any profits - the rate you pay depends largely on your other income.
  • The cost of registering and protecting a tenant's deposit - around £100 (although one scheme, the Deposit Protection Service, is free.)
  • Gas safety certificate - this depends on the number of gas appliances you have. British Gas currently charges £65 for a boiler-only gas safety check.
  • Energy performance certificate - budget for between £50 and £100
  • Landlord insurance - prices are highly variable depending on the area of the property and the type of tenants that occupy it
  • Repairs and maintenance - responsibility for these usually lies with the landlord, although this may not be the case if you lease the property to a council or housing association
  • Letting agency fees - look at the headline fees as well as the small print in case of unexpected extra charges such as a fee if you decide to sell up.