Analysis by portfolio landlord Open Property Group (OPG) has reportedly revealed that it pays out 32% of its gross rent each month in rental property expenses.
The company studied its 140-strong portfolio across England and Wales to establish what percentage of the gross rent it receives as net rent (gross profit) after subtracting typical running expenses but excluding financing costs.
Repairs were revealed as the biggest outlay in November, equating to 11% of the total rental income, while the cost of full-time property managers came a close second at 10%. General maintenance amounted to 7% and other costs such as gas safety, electrical safety and energy performance certificates totalled 5%.
This means its net rent is 68% of the gross rent, although this does not include mortgage, insurance, licensing and other miscellaneous costs.
Jason Harris-Cohen, MD at OPG reportedly said: “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.”