The cost of being a landlord: what you need to budget for

Becoming a landlord can be a smart investment, but it’s not without its costs. Whether you’re new to letting or expanding your portfolio, understanding what you need to budget for is essential if you want to protect your returns.

Here’s a breakdown of the typical costs landlords should plan for – and why working with a lettings agent like Jacobs Steel could actually save you money in the long run.

Mortgage and insurance

Your biggest ongoing expense is likely to be your buy-to-let mortgage. Monthly repayments vary depending on your interest rate and loan terms, so it’s worth reviewing regularly to make sure you’re getting the best deal.

You’ll also need specialist landlord insurance, which covers you for risks standard home insurance won’t, such as tenant damage or loss of rent due to fire or flood.

Maintenance and repairs

As a landlord, you’re legally responsible for maintaining the property and keeping it in a safe, habitable condition. That means budgeting for things like:

Annual gas safety checks and boiler servicing
Electrical safety checks
General wear and tear
Emergency repairs (e.g. leaks, broken appliances)

Set aside a contingency fund (ideally 10% of your rental income) to cover maintenance issues when they crop up. Find out more about how to handle property maintenance requests.

Legal and compliance costs

There are a number of legal obligations landlords must meet, including:

Gas safety certificate (annually)
EPC (valid for 10 years)
EICR – electrical safety report (every 5 years)
Right to rent checks on tenants
Deposit protection scheme registration

Failing to meet these requirements can result in hefty fines or legal disputes, so it’s crucial to stay compliant.

Letting agent fees

Letting agent fees are typically a percentage of your monthly rent or a fixed cost for certain services. While this may seem like an extra expense, a good agent pays for themselves in value and time saved.

At Jacobs Steel, our experienced lettings team handles everything from marketing your property and finding reliable tenants to ensuring legal compliance and chasing late rent payments. We also help minimise void periods, which are one of the biggest drains on a landlord’s income.

Find out more about how a lettings agent can help you manage your rental property.

Unexpected costs

Even the most prepared landlord can be hit with surprise expenses – from pest problems to tenant arrears or legal disputes. It’s wise to build a buffer into your budget for unexpected costs, especially if you own multiple properties.

How Jacobs Steel can help

Adam Seymour Branch Manager of Jacobs Steel Brighton and Hove

Being a landlord doesn’t have to be stressful. When you work with Jacobs Steel, you get the peace of mind that your property is being managed professionally and proactively. That means:

Faster lettings and fewer empty weeks
Up-to-date legal compliance
Prompt maintenance handling
Hands-off, hassle-free management

Whether you’re letting out your first home or managing a growing portfolio, we’re here to make your life easier – and help you maximise your rental return.