Why plan monthly
Many landlord costs arrive once a year or once every five years. A gas check every twelve months, an electrical report every five, a new EPC every ten. Spreading them out shows what the property really costs to run, so a big bill doesn't land on a month when the rent has already gone on the mortgage.
Worked example
A leasehold London flat letting for £1,850 a month, with a service charge, ground rent, insurance, certificates, an agent on 12% and £100 a month put aside for repairs, costs about £7,400 a year to run. That's around £615 a month, or 35% of the rent collected. With a £1,150 mortgage payment, almost nothing is left before tax.
Break-even rent
Break-even rent is the monthly rent you'd need to cover every cost and the mortgage, allowing for empty weeks and the agent's cut. If the market rent is close to it, one void or a boiler replacement puts the year into a loss.
Questions landlords ask
How much should I set aside for repairs?
There's no fixed rule. Many landlords budget a percentage of rent or a fixed monthly amount, and more for older properties. Adjust the repairs line until it matches your experience.
Which costs can I deduct from rental profit?
Running costs such as insurance, repairs, agent fees, service charges, certificates and accountancy are deductible. Mortgage capital isn't, and mortgage interest gets a tax credit instead.
Should the mortgage payment include capital?
Put in what you actually pay each month. Capital repayments are a cost to your cash flow even though they're not deductible for tax.
Sources
Last updated 1 October 2026.