Property maintenance of buy-to-let stock is costing landlords in the private rented sector around 28 per cent of their rental income each year according to research.
The research, conducted by letting management platform Howsy, discovered that the cost of maintenance for the average property in the buy-to-let sector currently totals £2,313 across the UK.
Interestingly, the region which saw the most expensive upkeep in buy-to-let homes was the East of England. In this area, the cost for maintenance reached 28 per cent of the annual rental income on average.
In contrast, the North East proved the most affordable region, with an average spend of 20 per cent on buy-to-let property from the rental income of landlords. Surprisingly, the capital only reached sixth place in maintenance costs of buy-to-let homes. Less than one quarter, at 23 per cent, of the average rent each year of £20,364, was spend on maintenance costs in London.
The location which proved the best for keeping maintenance costs down for investment property is Glasgow. The city required only 13 per cent of the average rental income of buy-to-let landlords on average. This was closely followed by Midlothian, West Dunbartonshire and Inverclyde, which all reached 14 per cent.
According to the research, Falkirk, Belfast, East Ayrshire and Burnley all require 15 per cent of the annual average rental income of landlords, while Clackmannanshire and Dundee were also among the cheapest rental locations for annual maintenance costs at 16 per cent.
Buy-to-let landlords who own rental homes in London can usually expect to enjoy the lowest costs for maintenance in the areas of Hounslow and Greenwich, at 23 per cent, and Dagenham and Barking and Newham, at 21 per cent. The cheapest area in the capital was Tower Hamlets, which commands the lowest cost for maintenance at 20 per cent of the average rental income for landlords each year.
The CEO and founder of Howsy, Calum Brannan, explains that covering the cost of maintenance in rental homes is a crucial part of managing buy-to-let investments. Failing to do this could not only cause reductions in the profitability of the rental home, with tenants continuing to search elsewhere for their new home, but it could also cause legal issues for you as a landlord if your rental properties are not fit for tenant occupation.
A wise place to begin when budgeting for the maintenance and upkeep of your rental property is to use the one per cent of the purchase price threshold, which acts as a general rule of thumb. However, it should be adequate enough to cover all the usual wear and tear that a rental property will go through, except the very worst destruction and damage to the home.
Inventory report software such as InventoryBase can produce property inventories to a professional standard, as well as reports for risk assessments, building inspections, interim property inspections and the checking out and in of tenants. This ensures that a landlord can prove the condition of the property before the tenant moves in and that any damage which has occurred has arisen from the tenant’s actions. With technology changing how the industry operates, landlords have an increased number of options to keep their investments profitable.
However, the government’s continued attack on the buy-to-let sector and landlord profits could have serious consequences, as landlords may cut corners on repairs and maintenance in order to get by. However, this research has shown that this is not always the case.
The rental sector in the UK is extremely varied and vast, and investing at the right time and in the right accommodation could see operating costs stay palatable while profits are robust.
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