Nowadays, I usually earn around £200 a month from the property, after paying tax on my rental income and meeting my mortgage payments, but it varies. But I don’t use letting agents – as a former tenant myself, I know they can be appalling – and I didn’t want to increase the rent for my tenant at a tough time, during the cost of living crisis. By comparison, neighbouring landlords are currently renting out their properties via local letting agents for £1,900 or £2,000 a month. That’s an increase of £100 – just over seven per cent – since I started letting it nine years ago. Now, it is let and I am charging £1,400 a month. I repainted the walls and installed new, modern storage heaters, to make the property more energy efficient to heat. I saw it as capital expenditure on an asset. Instead, I used my savings and took the opportunity to invest in the property while it was empty. But even though no one was paying the rent, I still had the service charges and the mortgage to pay, on top of all my own bills for my own home, plus I had to pay the flat’s council tax bill.Īs a result, during the pandemic, I didn’t break even. I have also had some costs which I’ve had to absorb – during Covid, my tenant left suddenly and the property was empty for a long time. Since then, the local council has introduced a £500 annual licensing fee for landlords, plus tax changes have come in which have increased the amount of tax I have to pay on my rental income. I’m a self-employed freelance writer and don’t have much of a pension or any employer contributions. My plan has always been to carry on paying off the mortgage and then sell the flat when my partner and I retire. When I last re-mortgaged, in 2019, interest rates were low and so I managed to fix for five years at just over 2 per cent. I was still managing to make around £500 a month in income, after paying my mortgage, so I could afford to keep my rent at the low end of the market. So I decided to let it for £1,300 instead. My neighbour, who is also a landlord, was charging £1,650 a month but I thought that was too expensive.
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