X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Buy-to-Let

    What’s costs do you consider?

    Hey everyone,

    I hope everyone’s have a great evening!

    What costs do you consider when weighing up your potential deals?

    I’ve seen people not take into account voids when working out their figures and some people only account for 5% for repairs and others say they should account 10%.

    I’ll love to have your opinions before I pull the trigger on my first BTL.

    Have a great evening everyone!

    Many thanks,

    Adam
    0
    0
    Evening Adam,

    Great question - I’m intrigued to see what everyone says, although I imagine the answer will depend on a few things. For example my next purchase is a new build, prime flat in a city centre. So I’m not budgeting for as many voids/maintenance as my previous purchase. 

    In all honesty, I’m very much just starting to build my portfolio, my company has some money in its business account as a buffer, and I don’t need to take cash flow yet. So actually I don’t budget for anything in particular - I have a buffer and that’s enough for me Smile
    0
    0
    It sort of depends on your strategy I think and various local costs. I always buy houses that need some work, so I factor in 4-12 weeks of refurb work which includes 100% council tax whilst empty. I then budget for 4 weeks to let the property, and 10% of rent as maintenance. 
    I find with maintenance it generally is not a trickle cost but a large bill, but 10% works out about right across my portfolio in terms of budget but it tends to be one or maybe 2 houses take up all the budget.
    I dont account for voids as my tenants tend to hang around so I just suck it up as and when they occur
    Andy
    1
    0

    Slowly working towards financial freedom


    > some people only account for 5% for repairs and others say they should account 10%.

    I struggle to get my head around the idea that maintenance/repairs account for a percentage of gross rent. The cost to replace a washing machine, or buy a double bed, costs exactly the same for a 1 bed as it does in a 2 bed

    I rent 1 bed flats in East London for around £1250/£1300, and 2 bed flats around £1550/£1600. I normally spend, on average, around £500 per year on maintenance. so this is the figure I use when stacking deals.

    DL (sorry, I'm not picking on you but we discussed this in detail before) says she spends around 30% on maintenance which for me is ridiculous, but I guess the point is know your figures and then measure every deal against the same set of figures so that you're comparing like with like

    0
    0

    Hi AdamSmith14,

    Firstly, congratulations on taking the first step in your property journey and for starting a good topic of conversation. I as RJW am intrigued to see others comments and what they include in their costs. Also as RJW states it is all dependent on people’s circumstances so the answer will vary. I hope the comments will help you along your way and look forward to seeing an update on your journey in the future.

    0
    0

    Transparency notice: OneandOnlyPro is a commercial partner of Property Tribes.

    I have 2 x BTL's and I put aside around 11% for repairs and void periods.

    Added to that , I put aside a monthly sum that covers the gas / electric certificates and RGI for both and LL insurance for the house.

    I then put aside a monthly amount for tax. I even put money aside for remortgaging fees as I remortgage every 2 years to get the best rate.

    I have been letting out first property which is a semi detached house out now for 6 years and the second property, which  is a flat , for 5 years.

    I have built up quite a war chest now of void / repair money and am pausing paying anymore into it for the next 2 years whilst I use that money for something else.



    1
    0