Landlord Expense Calculator

Landlord expense calculator captures the full cost burden of property ownership. 24,000 gross rent with mortgage interest 8,000, agent fees 10% (2,400), maintenance 8% (1,920), insurance 300, taxes 2,000 = 14,620 total expenses. Net income = 9,380. Expense ratio 61%. Higher than '50% rule' suggests - reality often more expensive than guidelines.

Hidden costs landlords forget: (1) Tenant turnover (1 month void + cleaning + repairs = 2 months equivalent rent). (2) Legal reserve (eviction process 2-5k). (3) Accountant fees (500-1500 annually). (4) Annual gas safety/EPC certificates (100-300). (5) Maintenance compounds: small 200 issues add up to 2,000+/year. (6) Capital expenditure reserve (boilers, roofs, kitchens). True expense ratio often 50-70% of gross rent.

Section 24 impact (since 2020): mortgage interest no longer deductible against rental income for individuals. Replaced with 20% standard rate tax credit. upper-rate taxpayers significantly worse off. Limited company SPV preserves full interest deduction but adds corporation tax (25%) plus extraction tax. Always model post-tax cash flow - many BTLs marginally profitable pre-tax become loss-making after Section 24.

Run it with sensible defaults

Using gross annual rent of 24,000, annual mortgage interest of 8,000, agent fees of 10%, maintenance reserve of 8%, the calculation works out to 14,620.00. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Gross Annual Rent, Annual Mortgage Interest, Agent Fees %, Maintenance Reserve %, and Annual Insurance — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

How the math works

Sum of all expense lines: mortgage interest + agent fees + maintenance + insurance + taxes.

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.