Buying your first rental property is not only about saving the deposit. The full cost can include Stamp Duty or the relevant property tax, legal fees, mortgage costs, insurance, repairs, safety checks, letting fees and periods where the property has no tenants.
For first-time landlords, these costs can make a big difference to whether the investment feels workable. A property may pass the lender’s mortgage checks, but you still need to know whether the numbers make sense after upfront and ongoing costs are included.
This guide explains the main costs to think about before buying your first buy-to-let property.
Before budgeting for your first rental property
✓ Budget for more than the deposit
Stamp duty, legal fees, mortgage fees, valuation costs and setup costs can all add to the amount needed upfront.
✓ Check the mortgage costs and monthly payment
The rate, loan size, fees and mortgage type can affect both your upfront costs and ongoing monthly cash flow.
✓ Allow for ongoing landlord costs
Insurance, repairs, safety checks, service charges, letting fees and maintenance can all affect the return from the property.
✓ Keep a cash buffer after completion
Money held back can help cover repairs, delays, periods without tenants or unexpected costs once the property is rented.
The main cost groups to budget for
Before buying your first buy-to-let, it helps to separate the costs into clear groups. That way, you are not only planning for the deposit.
Buying costs
Upfront costs before completion
This can include your deposit, Stamp Duty or the relevant property tax, legal fees, valuation fees and lender fees.
Borrowing costs
Costs linked to the borrowing
Arrangement fees, product fees, broker fees, where applicable and monthly repayments can all affect the overall cost.
Let-ready costs
Getting the property ready to rent
You may need to budget for repairs, cleaning, furnishing, insurance, safety checks and any work needed before tenants move in.
Running costs
Landlord costs after completion
Agent fees, maintenance, empty periods, tax, compliance and future repairs can all affect your rental return.
Thinking about costs in this way can help you avoid focusing only on the deposit. The property still needs to feel manageable once the purchase completes and the day-to-day landlord costs begin.
Deposit and mortgage costs
Your deposit is usually the highest upfront cost when buying a rental property.
Buy-to-let mortgages often need a larger deposit than standard residential mortgages. The exact amount depends on the lender, property, expected rent, loan-to-value and your wider financial position.
You may also need to budget for:
- Mortgage setup fees: lender arrangement fees, product fees, valuation fees and broker fees, where applicable
- Borrowing-related costs: early repayment charges if you are raising funds from another property
- Ongoing payments: monthly mortgage payments after completion
Some fees can sometimes be added to the mortgage, but this usually means paying interest on them over time. It is worth checking the short-term and long-term costs before deciding.
Stamp Duty and property tax costs
Stamp Duty or the relevant property tax can be one of the highest costs when buying a rental property.
If you already own another property, higher property tax rates may apply when buying an additional residential property. The rules depend on where the property is in the UK and your circumstances, so it is important to check the position before making an offer.
This cost can affect how much cash you need at completion. It may also influence the price range that feels realistic once your deposit, mortgage fees and other purchase costs are included.
You should speak with a tax adviser or solicitor if you are unsure how the rules apply to your purchase.
Legal fees and conveyancing costs
You will need a solicitor or conveyancer to handle the legal side of the purchase.
Legal costs can include:
- Conveyancing fees: the solicitor or conveyancer’s charge for handling the purchase
- Searches and checks: local searches, title checks and lender requirements
- Land Registry and transfer fees: charges linked to registering the property and moving funds
- Leasehold checks: lease review, service charges, ground rent and management company information, where relevant
If you are buying through a limited company, there may also be company-related legal checks. This can make the process more involved than a standard personal purchase.
Insurance, safety checks and compliance
As a landlord, you may need different insurance and safety arrangements compared with a standard homeowner.
This can include landlord insurance, buildings insurance, contents cover if you provide furnishings, and cover for loss of rent or legal expenses if suitable.
You may also need to budget for:
- Gas and electrical safety: checks may be needed before or during the tenancy, depending on the property
- Smoke and carbon monoxide alarms: alarms may need fitting, checking or replacing before tenants move in
- Tenancy deposit protection: tenant deposits may need to be protected under an approved scheme
- Licensing: some properties or areas may require a landlord, selective or HMO licence
- EPC position: the property may need to meet minimum energy standards before it can be let
These costs should be checked before you buy, especially if the property needs work before tenants can move in. The aim is to understand whether the property is ready to let, or whether compliance costs need to be built into your budget.
Repairs, maintenance and setup costs
A rental property may need money spent on it before it is ready to let. Even if it looks in good condition, small jobs can quickly add to the upfront budget.
You may need to allow for:
- Cleaning and decoration: fresh paint, deep cleaning, minor repairs and general presentation before tenants move in
- Fixtures and fittings: flooring, appliances, blinds, lighting, locks or basic furnishings where needed
- Energy and comfort improvements: insulation, heating checks, ventilation or efficiency upgrades
- Future maintenance: boilers, roofs, windows, bathrooms and kitchens can all create costs over time
A first rental property can feel stretched if every spare pound goes into the purchase. Keeping a maintenance buffer can make the investment easier to manage once you become responsible for repairs, tenant issues and ongoing upkeep.
Letting agent and management fees
If you use a letting agent, you may need to pay fees for finding tenants, referencing, setting up the tenancy, collecting rent or managing the property.
A fully managed service can reduce the day-to-day work involved, but it will also reduce the rental income you keep.
Before deciding, compare:
- Tenant find only: the agent helps find and reference tenants, but you manage the property after the tenancy starts
- Rent collection: the agent collects rent, but you may still handle maintenance and tenant issues
- Fully managed: the agent handles more of the day-to-day work, including communication, repairs and management tasks
- Self-management: you may save on agent fees, but you will need to handle tenants, repairs, compliance, inspections and rent collection yourself
The right option depends on your time, experience, location and confidence as a landlord. For a first rental property, the cheapest option is not always the easiest to manage.
Empty periods and rental gaps
A buy-to-let property may not always have a tenant.
There may be gaps between tenancies, delays before the first tenant moves in, or periods where repairs are needed before the property can be let again.
During that time, you may still need to cover:
- Mortgage payments: the mortgage usually still needs paying even when no rent is coming in
- Insurance and service costs: landlord insurance, service charges, utilities or council tax may still apply
- Repair costs: work may be needed before the property can be re-let
- Letting costs: finding and setting up a new tenant can create extra fees
This is why rental income should not be viewed as guaranteed every month. A sensible cash buffer can help protect the investment when the property is empty.
Tax and ongoing financial planning
Rental income can have tax implications, and the way you own the property can affect how profits are treated.
If you buy in your personal name, the tax position may be different from buying through a limited company. You may also need to think about allowable expenses, mortgage interest treatment, record keeping and what happens if you sell the property later.
It is also worth planning ahead for ongoing costs. Accountancy support, tax returns, repairs, maintenance, insurance and periods without tenants can all affect the return you keep.
Tax rules can change, so it is sensible to take professional tax advice before buying your first rental property.
How Muttuo Mortgages can help
Muttuo Mortgages can help you look beyond the deposit and check whether your first rental property looks workable from a mortgage point of view.
We can review the expected rent, deposit, loan-to-value, borrowing route and lender options across over 100 lenders.
Our team can help you review:
✓ whether your deposit and loan-to-value are likely to fit lender criteria
✓ whether the expected rent supports the mortgage
✓ how mortgage fees and repayments may affect the numbers
✓ what lender options may be available for your first rental property
✓ what may be realistic before you commit to the purchase
That can help you see whether the mortgage, rent and deposit position works before you apply.
Buying your first rental property?
We can help you check the mortgage, rent and deposit position before you apply.
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Frequently asked questions about first rental property costs
These FAQs cover common questions about deposits, purchase costs, landlord expenses, empty periods and how to plan your first buy-to-let budget.
What costs should I budget for when buying my first rental property?
You should budget for more than the deposit.
Common costs can include Stamp Duty or the relevant property tax, legal fees, valuation fees, lender fees, mortgage payments, landlord insurance, safety checks, repairs, letting agent fees and periods without tenants.
Do I need extra money after buying a buy-to-let property?
Yes, it is sensible to keep money aside after completion.
A cash buffer can help cover repairs, maintenance, tenant gaps, insurance, safety checks and other costs that arise once you own the property.
Are buy-to-let costs different from residential property costs?
Yes, they can be.
Buy-to-let purchases can involve different mortgage criteria, larger deposits, landlord insurance, rental checks, compliance costs and additional property tax considerations. The property also needs to work as an investment, not just as a purchase.
Do first-time landlords pay Stamp Duty?
You may need to pay Stamp Duty or the relevant property tax when buying a rental property.
If you already own another property, higher rates may apply. The rules depend on where the property is located and your circumstances, so you should check the position with a solicitor or tax adviser before buying.
Should I include void periods in my budget?
Yes, you should allow for periods without tenants.
Even if the property is expected to rent quickly, there may be gaps between tenancies or delays while repairs are completed. Your mortgage and other property costs may still need to be paid during that time.
Should I use a letting agent for my first rental property?
It depends on how much time, confidence, and landlord experience you have.
A letting agent can help with finding tenants, referencing, rent collection, management and repairs, but their fees will reduce the rental income you keep. Some first-time landlords prefer support at the start, while others manage the property themselves.
Can Muttuo Mortgages help me check the numbers?
Yes, and more.
Muttuo Mortgages can help you review the deposit, expected rent, loan-to-value and mortgage options before you apply. This can give you a clearer view of whether your first rental property may be realistic from a lending perspective.
