Beyond the usual costs of buying a property, there are additional costs involved, both one-off and ongoing that need to be budgeted for.

For kitting out a rental property:

If you are letting privately, you will more than likely have to pay for advertising or use a lettings agent. Agents will usually charge around 10% to 15% of the annual rental income, plus VAT.

Once you find a tenant but before you receive any rent, expect to have to pay for:

This documentation and tenant checks are likely to cost you around £100 to £300. Landlords and letting agents can no longer charge tenants for admin fees in England under new rules introduced on 1 June 2019. This includes things like credit checks, renewing tenancy fees and references. The ban will apply to new assured shorthold tenancies which start after this date.

These fees are already banned in Scotland and are under review in Wales and Northern Ireland.

Additionally, a cap on the amount you can ask for as a deposit has been introduced in England at the same time. This cap will be no more than five weeks' rent (six if annual rent is over £50k) and one weeks' rent for a holding deposit. More information can be found from the Residential Landlord Association.

In Scotland, you can't ask for more than two months' rent as a deposit and you can't charge a holding deposit.

Any deposit money must be held in a tenancy deposit protection scheme (TDP) if it's an assured shorthold tenancy agreement (most privately rented homes use this). This protects landlords from rogue tenants who damage the property and also prevents landlords withholding the return of the money without good reason. Any disputes over the deposit are independently adjudicated.
​

Other costs you may have to factor in:

Landlords in some areas of the UK are required to register with local councils at a cost of around £500 to £1,000. Fines can be imposed on those that don't and these can run into thousands of pounds. And in Scotland, Wales and Northern Ireland, there are national schemes which make it mandatory for all landlords to register. This generally costs under £100.

Your tax liability will depend on your circumstances. But there are generally two main taxes you are likely to encounter once you have bought a buy-to-let and start renting it out: rental income tax and Capital Gains Tax if you sell.

Repairs

There are likely be high levels of wear and tear and things like plumbing can break. Repairs can cost time and money. Furthermore, if your buy-to-let property is a flat in a development, there may be repairs and costs that are outside of your direct control.

The Gas Safety Regulations

A legal duty on landlords with regards to the installation and maintenance of any gas appliances and pipework. It requires an annual inspection and safety checks.

Smoke and carbon monoxide alarms

Landlords in England must install smoke and carbon monoxide alarms or face a penalty of up to £5,000.

The Electrical Equipment Regulations

Any electrical equipment between 50 and 1,000 volts must be tested and declared safe.

The Furniture and Furnishings Regulations

This requires furniture and furnishings to be fire resistant and not produce harmful, noxious smoke in the event of a fire.

Immigration checks - 'Right to Rent' scheme

Anyone who is planning to let a property must check that prospective tenants have the 'Right to Rent' in the UK, or you could be fined up to £3,000 for letting to an illegal migrant. For more information read this Right to Rent User Guide from the Home Office.