Buy to Let Property Costs

Buy to Let Costs - the cost of letting

Buy to Let Property Costs

Buy to Let Property Costs – investment property can provide you with an income. But you’ll need to consider the Buy to Let Costs involved.

A buy to let property investment can provide you with an income. But you’ll need to consider Buy to Let costs, and how these costs might impact on your overall profitability.

There are several buy to let costs. Certain costs associated with your buy to let need to be paid upfront. However, other costs will be ongoing. Some costs can be offset against your rental income. Therefore, we highly recommend that you seek out professional financial and legal advice before buying a buy to let property.

Buy to Let Costs include:

  • Mortgage Costs
  • Insurance
  • Letting Agent Fees
  • Tax
  • Maintenance & Repairs
Mortgage Costs

Most buy to let mortgages require a 25% deposit. In addition to a deposit of 25%, you’ll usually need to pay a mortgage  arrangement fee. Furthermore, buy to let mortgage fees can be high. These fees can normally be paid or added to your mortgage. 

Equally, there’s the ongoing monthly cost of your buy to let mortgage, your monthly repayments. You should take in to account what are known as rental voids, when tenants don’t pay. It’s a good idea to put a plan together about how you’ll keep up your repayments, should you go through periods when your property isn’t rented.

There are also those fees you experienced when buying your home. For example:

  • Legal Fees
  • Mortgage Valuations
  • Stamp Duty Land Tax
Insurance Costs

Just like with every property you own, it’s prudent to consider insurance. You’ll need to have buildings insurance, particularly if you have a buy to let mortgage. If you plan on having a furnished property let, you should consider taking out contents’ insurance.

It’s a good idea to consider covering yourself against other risks such as:

  • Landlord’s Liability
  • Rental Guarantee 
  • Emergency Repair Assistance
Rental Agent Fees

Where you’re thinking of using a letting agent to manage your buy to let property, you’ll need to take account of these costs as well. The cost of a managing agent for your buy to let will depend on the level of service you expect to receive. Costs can range from as low as 5% and increase to over 15% of your rental income.


When you start to rent your property out we recommend that you advise HM Revenue and Customs. You’ll need to tell them about your rental income each year. You may have to pay tax on any profits you make from renting property. It may be permitted to deduct certain expenses from your profits. There has been considerable change in this area, so always consult a professional. Always take specialist tax advice where possible.


As the owner of a buy to let property you’re legally responsible to keep your property in a good condition. You’ll need to budget for ongoing maintenance and repairs rather than wait for an unexpected and potentially large bill to land on your door-step. Information provided by MDFS. You may wish to review Buy to Let Property Yields.

If you would like more information about mortgages we recommend the Money Advice Service.