What does it actually cost to be a landlord?

A realistic cost breakdown and how each line item eats into gross yield.

8 min read · Updated 2 August 2026

Overview

Gross yield is the number that sells a property; net yield is the number you live on. The gap between them is compliance, maintenance, voids, insurance, agent fees and tax — and it is routinely underestimated by several percentage points.

Why it matters

A property advertised at a 7% gross yield can land under 3% net once every recurring cost is counted, which changes the investment case entirely.

Legal requirements

Safety certificates and their renewals are non-negotiable recurring costs.
Licensing fees apply where a scheme covers the property.
Deposit protection and required documents carry administrative cost even where scheme fees are met by the tenant.

Common mistakes

Budgeting zero voids — one month empty is over 8% of annual rent.
Ignoring the interest tax reducer and treating mortgage interest as fully deductible.
Forgetting the periodic capital costs: boiler, roof, kitchen, bathroom.
Underinsuring by using standard residential cover rather than landlord cover.

Practical guidance

Model a void allowance of at least one month per year unless you have data showing better.
Set aside 1% of property value annually for maintenance and capital renewals.
Recalculate net yield after every rent change and every cost increase.
Run the numbers before purchase using the same assumptions you will use to review it later.

What are the typical recurring costs?

Landlord insurance, gas safety, periodic EICR, EPC renewal every ten years, licensing where applicable, agent management fees, service charge and ground rent on leasehold, and ongoing maintenance.

How do I compare properties fairly?

Use the same cost assumptions across every property and compare net yield and return on cash invested, not headline gross yield.