Thursday 18 April 2019

How much are Chichester’s landlords spending on property maintenance?

As the tax year recently came to a close, annual account statements were sent out to all of my landlords who employ me on a full management basis. It’s not something I publicise I do (free of charge) as part of my lettings service, but I think it will make my landlords (or their accountants!) lives easier come self-assessment time. 
The statement breaks down the total rent they have received in the tax year for each property, along with any deductions that were made (my management fees and any property maintenance costs). It’s similar to what I send each month when the rent comes in, but this time for the whole tax year.
Not only is this a nice overview for the landlord, whilst again demonstrating my complete transparency in regards to fees, but it also ensures all costs are accounted for so that they can claim the maximum tax relief. This is increasingly important at a time when mortgage interest relief for landlords is reducing.

It also gives me some great figures to analyse, which I wanted to share with you.

The average rent my landlords are achieving is £1,100pcm, which is 11% higher than the current average rent in Chichester of £995pcm. Plus, they have received all of the rent due to them i.e. there were no non-paying tenants all year - phew!
What’s more is that my unique fixed-fee structure is proving to be excellent value for my landlords; demonstrated by my average landlord being charged just 9.2% in total for a full tenant find and ongoing management service. One landlord is paying just 6.2% as their property achieves a particularly high rent, meaning my fixed fee proves to be even cheaper for them.
What was also interesting to see is that my landlords are spending £470 a year on average on property maintenance, which is just 4.5% of the total rent they receive. 

Common lettings advice is to set aside 10% of your annual rent to account for property maintenance, but my landlords are doing far better than this. I suspect this is partly because I focus on more modern properties, which should inherently have fewer issues, and because I tend to endorse the attitude of ‘prevention being better than cure’ i.e. spending a little in the short-term to save a lot in the long-term.

I hope it’s also partly down to the carefully selected maintenance contractors I use, who offer good value for money, plus the fact I don’t add a mark-up to maintenance costs or charge additional commission. I also often check issues for myself to see if they can be rectified by me, free of charge, before getting in the paid help. 

If you’d like to discuss the ins and outs of how I can make the management of your rental property a little bit easier and perhaps more cost-effective, please get in touch. 

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