The insurance provider looked at all the costs involved in purchasing a property to rent as well as the frequency of payments and which areas of the country you can maximise on your investment.
The analysis revealed, when planning their finances, landlords should factor in several fees to their financial calculations.
These include less regular costs such as the Energy Performance Certificate (EPC), which will set you back £65 every decade, to bigger more onerous fees such as weekly National Insurance contributions which amount to £156 every year.
But the insurer also urged budding landlords to think about other expenses which can cause ‘setbacks’ to their income, including the cost of maintenance repairs and replacements.
This can include something minor, such as a supplying a new toaster, or a major outgoing such as replacing the dishwasher. Either way, it said landlords should plan for these additional costs.
The study found the average cost of buying all the household appliances to kit out a rental property was £3,650. There is also an annual replacement cost on top of £50, it found.
Furnishing the home will also cost, on average, £1,314 for a one bed house, with a replacement cost of £115.
| Fees | Frequency | Annual Cost (£) |
| Tenancy Deposit | Every new tenant | £40 |
| Landlord Insurance | Yearly | £179 |
| Energy Performance Certificate | 10 Years | £65 |
| Gas Safety Certificate | Yearly | £80 |
| National Insurance | Weekly | £156* |
| Landlord Licence Fee | Every 5 Years | £51.95** |
| Total Annual Cost (£) | £609.95 |
*National insurance fee based on profits being between £6,365 and £8,632 a year. **Annual licence fee costs taken from an average of England, Wales, Scotland and Ireland.
Best locations
CIA Landlord also found Brighton was the most profitable UK city to be a landlord because the average property price of £365,000 meant landlords could expect to make a profit of £668.95 a month. The city even beats London as the top investment spot.
Researchers used property price, mortgage cost, average rent, and the monthly costs of being a landlord to calculate monthly profit.
Richard Wayman, finance director at CIA Landlord said: “When looking into the true costs of being a landlord, it can certainly come as a surprise to some at just how expensive certain requirements are.
“Before taking your first step into the property ladder, we recommend you consider all the required costs involved and ensure you invest in an area that will be profitable for you in the long-term future.
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Do you have a question about your buy-to-let mortgage? If so our expert Jeni Browne of Mortgages for Business is on hand to help.
Send your questions to kate.saines@emap.com or click here to read more buy-to-let Q&As.
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Toaster , dishwasher are not items that are compulsory to be provided.
Deposit protection can be done by landlord saving 40 pounds.
No one makes money out of rental in the first say 5 to 7 years. Otherwise every one would be doing it.