A full picture of what it costs you to be a landlord is crucial. If you don’t charge all your costs on to your tenants, this will reduce your income from renting space – and drain the resources available for your charitable work.
The rent you can charge tenants is dependent on your location and the quality of accommodation you are offering, and will be dictated by the local market. The service charge
will depend on how much it costs you to run the building and the level of servicing provided should be appropriate and affordable to the tenant, therefore clarity on your target market and what they can afford to pay is key.
What does it cost?
Whether you plan to charge at commercial rates and generate a surplus to spend on other work, or use grant funding to part-subsidise costs to your tenants, you need to fully understand what it will cost you to be a landlord.
You can use our table
to pull this information together and build up a picture of the full cost of being a landlord.
As a landlord, you incur different kinds of costs:
These are the core costs associated with your rental or ownership of the building. This includes the rent you pay to your landlord or mortgage repayments on premises you own, business rates, buildings insurance, legal or surveying fees and basic décor.
Staff time required to manage the premises and administer tenancies
Managing repair and maintenance and service contracts takes staff time. You also need to allow time for someone to manage tenants (find tenants, deal with tenants moving in and out and troubleshoot and answer queries) and administer the tenancy
eg. issuing leases, invoicing tenants etc.
Repairing and maintaining the premises
If you rent the premises, your lease
will set out your responsibility for repairing and maintaining the premises. Your landlord will charge you for repair and maintenance of communal areas through a service charge. It is your responsibility to maintain the areas of the premises you occupy, in line with the requirements of your lease.
If you own the premises, you should draw up and cost a schedule of planned maintenance to keep the premises in good condition to protect your property investment. Follow this link to find out more about this in our Repairs and Maintenance section
Repair and maintenance costs include one-off costs that you will want to phase over a number of years and ongoing costs that will recur each year.
Services are the ‘consumables’ required on an on-going basis to run the building. This will include items from utilities and cleaning to tea and coffee and toilet rolls, depending on the range of services you plan to provide to tenants.
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