A property company’s portfolio of more than 140 rental units recently analysed its costs and shared them with the media.

The units owned by the self-proclaimed cash buyer and portfolio landlord company are throughout England and Wales, and an analysis was carried out to determine what percentage of the gross rent was gross profit, typical running costs were included in the exercise however financing expenses were not allowed. 

The company says: “The findings act as a stark reminder to landlords that the management aspects of a rental portfolio alone can make up a large chunk of the monthly rental income, eating into profits, and all on top of additional finance and miscellaneous costs.”

In November the biggest costs incurred was for repairs reducing the gross rental income by 11 per cent, however the close runner up was for the company’s full-time property managers by 10 per cent.

General maintenance took a further 7.7 per cent off the gross total rental income, other additional costs included electrical and gas safety certificates and EPC certification amounted to 5.6 per cent.

All in all after deducting total costs the net rent left was 68.5 per cent of the gross rent, but it must be stressed that the figures worked with did not include financial expenses such as insurance, licensing, mortgage and other ancillary costs.

Managing director Jason Harris-Cohen, says: “The analysis of our portfolio highlights that there are many costs involved in owning and managing a rental portfolio, over and above the obvious expenses like finance costs if the portfolio was not purchased with cash.

“Even if a landlord doesn’t outsource the management, there is still a value they need to put on their time, and these are the kinds of costs they should be scrutinizing when evaluating the health of property portfolios. 

“With falling property prices, increased management costs and higher borrowing rates, landlords need to ensure they are conducting a thorough review of their rental portfolio profits to understand which properties are still a viable investment.