Mortgage payments
Mortgage payments are often the largest ongoing cost.
Depending on mortgage type, payments may include:
- Interest only
- Interest plus capital repayment
Changes in interest rates can significantly affect monthly profit.
Letting and management fees
If a letting agent is used, fees are often charged as a percentage of rent.
Fees may cover:
- Tenant sourcing
- Rent collection
- Property management
These costs reduce rental income before profit is calculated.
Maintenance and repairs
Maintenance covers ongoing wear and tear, minor repairs, and general upkeep.
Some calculations assume maintenance as a percentage of the purchase price per year, while others use a fixed monthly amount. Actual costs may vary year to year.
Insurance
Landlord insurance typically covers:
- Buildings insurance
- Liability protection
- Optional additional cover
Insurance costs are usually paid monthly or annually and should be included in running costs.
Service charges and ground rent
For leasehold properties, service charges and ground rent may apply.
These costs are usually fixed but can change over time and affect profitability.
Other recurring costs
Additional recurring costs may include:
- Accountancy fees
- Safety certificates
- Miscellaneous property-related expenses
Including all known recurring costs helps produce more realistic estimates.
Using the calculator
The calculator allows individual costs to be adjusted so their impact on monthly profit and ROI can be seen clearly.