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Upfront buy-to-let costs to include before you buy

Upfront costs are the one-off expenses incurred when purchasing a buy-to-let property. These costs determine how much cash is required before the property generates rental income.

Key Takeaways

  • 1Upfront costs increase total cash invested
  • 2They affect ROI rather than monthly profit
  • 3Missing costs can distort return calculations
  • 4Including them improves comparability between properties

Deposit

The deposit is the portion of the purchase price not covered by the mortgage.

Deposit size affects:

  • Mortgage amount
  • Monthly mortgage payments
  • Total cash invested

Legal and professional fees

Common professional fees include:

  • Solicitor or conveyancing fees
  • Survey or valuation fees

These costs are usually paid during the purchase process.

Refurbishment and setup costs

Some properties require repairs or improvements before they can be let.

Refurbishment costs increase upfront investment but may affect rental income or maintenance costs later.

Purchase taxes

Transaction taxes depend on:

  • Property location
  • Buyer type
  • Whether the purchase is an additional property

These taxes are typically paid shortly after completion.

Total cash invested

Total cash invested usually includes:

  • Deposit
  • Purchase taxes
  • Legal and professional fees
  • Refurbishment costs

This figure is used when calculating ROI.

Using the calculator

The calculator includes upfront costs when calculating total cash invested and ROI, allowing you to see how one-off expenses affect returns.

Try These Numbers in the Calculator

Put what you have learned into practice with our buy-to-let calculator.

Open Calculator

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