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Net income when buying and letting

What does 4.9% net income mean when buying a property and getting it rented by the agency in the French Alps?

Asked on Jan 12 2018, General in Stroud | Report content

Answers (1)

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  • Hello - Net income is what is left after all the property management expenses have been deducted from the total rent received. For example, if you were to receive 1,000 Euros from the rented property and the costs were 600 Euros, your net income would be 400 Euros. Below are some of the main ongoing costs involved when renting property: - Mortgage (Capital / Debt Servicing) Payments; - Ongoing Repairs / Maintenance / Redecorating; - Lettings Management / Agency Fee; - Property Management Software Subscription Fees - Insurance - Building; - Insurance - Contents; - Insurance - Rent Protection; - Insurance - Boiler; - Insurance - 24/7 Emergency Cover; - Annual Gas Certficate; - Annual Electrical Testing; - Portable Appliance Testing (PAT) Report; - Travel Expenses Mileage; - Smoke and Carbon Monoxide Detector Testing; - Furniture & Furnishings; - Ground Rent (Leasehold / Share of Freehold Properties); - Service Charges (Leasehold / Share of Freehold Properties); - Legal, Accountancy & Tax Advisory Costs; - Limited Company Management Cost; - Rental Cover Insurance; - Reserve (Liquidity) Fund (between 10-25% of monthly rental income). Note that these costs apply to UK property and the rules / requirements will be different in France.

    Answered on Jan 15 2018, Report content

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