Are there lots of hidden costs with buy to let investment property?
Although the tenant is responsible for the interior costs of the house such as the utility accounts, the Council Tax and the TV licence, if you have a vacant period you will incur those costs. Furthermore, you should bear in mind the costs of keeping a property at a marketable level. General expenses include the Letting Agent’s commission and management fees. Before signing with an agent make sure that you know exactly how much you will be paying them, and whether you will incur fees in the event of defaulting tenants etc. Managing a buy to let property always ends up costing more than just the mortgage repayments. It is generally advised that you should be achieving a gross rent of between 125 and 150 per cent of interest-only mortgage repayments. This will cover your costs of buying to let.
