At the start of the year, I received a letter informing me that in the autumn I’ll be billed for £2,500, for repairs to the exterior of a block of flats where I own a four-bedroom rental property. I wasn’t aware the building needed any repairs; it looks absolutely fine to me, but the local council owns the freehold — and the majority of flats in the block — so if it’s determined to carry out work, I am required to pay my share.
On the plus side, it’s good to have a freeholder who wants to keep the building in good nick and will organise any necessary work, but it’s always a shock to be presented with such a large bill.
It’s a reminder of the need to squirrel away quite a large chunk of the rental income every month to build up a contingency fund. Have I done that? Nope. Thanks to the early warning from the freeholder, I’ve got a few months to save up.
I’m also going to have to arrange and pay for repairs to the exterior of another property, where the elaborate cornice over a large bay window has been badly eroded by weather and time, and now looks shabby. Plus, the large external window sill is badly cracked and will have to be replaced.
That cosmetic facelift is going to cost me around £2,000, but it’s necessary in order to increase the property’s kerb appeal, especially as I’m trying to attract new tenants at the moment. One look at the exterior building might put them off, even though the inside of the flat is really rather nice.
Electrical safety checks on both properties are also due this year, and my electrician has told me to brace myself for a bill of about £1,000 for each.
“There’s bound to be quite a bit of work,” he tells me. “There always is.”
One of my properties is classed as a small HMO (House in Multiple Occupation), because it’s let to more than four sharers, so I am legally obliged to have the fixed wiring tested every five years.
The other is a one-bedroom flat so, strictly speaking, I’m not obliged to have electrical safety checks, but I want to anyway — just to make sure it’s safe. If there was a fault and the tenant suffered an injury as a result, I’d be to blame. Also, the inside of the one-bedroom flat could do with repainting before new tenants move in. If I get the whole place done, it will cost more than £3,000.
So I’ll be lucky if I get away with spending anything less than £9,500 on the two properties this year, which is roughly half what I expect to have left over from the rent, after I’ve paid the interest on the mortgages.
I realise that I’m fortunate that I don’t depend on my rental properties for an income, so I can use any profit I make from the rent to keep them in good condition.
Like other landlords with mortgaged properties, I’m also counting my lucky stars that interest rates are so low, otherwise I wouldn’t have any profits to plough back in.
- Victoria Whitlock lets three properties in south London. To contact Victoria with your ideas and views, tweet @vicwhitlock