Obviously, the cost will vary considerably, depending on what type of property you have and where in the UK you’re investing, but here are the key things you need to be aware of and investigate.
This is likely to be your biggest monthly outgoing and the cost can have quite an impact on your finances if you don’t have any rental income to cover it. Most buy-to-let landlords have around a 75% loan to value, which equates to roughly £500 a month for an interest-only mortgage payment on the UK average house price of £224,144. (Land Registry, March 2018.)
Most policies state that if the property is unoccupied for more than 30 days, your insurance becomes invalid. Not every company will insure a vacant property and you have to be prepared for your premium to rise. On top of that, you’re likely to have to satisfy a number of conditions, including draining down the heating system and making frequent checks on the property, as it’s at a much greater risk of being broken into, vandalised, etc.
Empty properties used to be exempt from council tax, but this is no longer the case. So if you don’t have tenants paying it, you’re liable. If the property is unfurnished, you get one month free before the full charge kicks in, but if it’s furnished, you have to pay as soon as it’s empty. After 2 years – and hopefully you’ll never hit that! – it rises to 150% of the charge.
Assuming the utilities remain connected, you’ll need to keep checking that everything is okay (this is likely to be a condition of your insurance). You’ll have to cover the standing charges for things like meters and phone line rental, and if it’s cold outside, you’ll need to pay some heating costs to keep the property in good condition.
Things like dust and dead insects will do nothing to attract new tenants – plus, if you’re having viewings, the carpet will get dirty – so you really have to keep the property clean. Once a month will probably be enough, but if you don’t have time to do it yourself, you’ll need to pay someone reliable to keep it fresh.
Again, you need to keep the property looking its best, so you’ve got to spend some time and money maintaining the garden. During the summer months, lawns and shrubs are growing more quickly; during the autumn and winter you’ve got leaves and other debris to clear up.
Empty properties are at a greatly increased risk of being vandalised and broken into – you might even get squatters! – and the cost of repairing the damage could be significant.
One final tip: Even if you have insurance, you’ll need to be able to prove you’ve been making the checks specified in your policy, so keep a log and take photos and meter readings every time you’re at the property.
Image credit: Soaringbird