Profit Margins and expenses – there’s easier ways to earn a crust?
When looking for a comparison of typical Private Rental Costs v Income I struggled. The Tax return asks for number of properties [SA105 box 1], Income from rent & property [box 20],
They ask for Expenses-
rent, rates, insurance, ground rent [24]
repairs & maintenance [25]
allowable finance costs [26]
legal, management, professional [27]
Less private use adjustment [30]
Taxable profit [40]
The profit margin (for our own interest) requires an estimate of the portfolio value.
Has anyone seen this information published?
20/21 will not be typical for many due to the pandemic. Having done this for the last two years I got:-
Box no. 19/20 20/21
24. 6% 8.5% (insurance etc)
25. 7% 12.5% (maintenance)
27. 4% 4.8% (professional)
30. – 3% – 4.1% (private use)
40 86% 78.3% (taxable profit)
ROCE 5.25% 3.9% (before finance cost)
Net profit 2.25%. 0.9%. after finance cost.
Then of course there’s tax on the profit [40], and loss of certain benefits as income increases ……..
One thing is certain, there’s easier ways to earn a crust!
Chris
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Member Since June 2013 - Comments: 3237 - Articles: 81
8:18 AM, 29th January 2022, About 4 years ago
Yes I could potentially be twice as well off (exaggerating) & 70 hours free if sold the lot.
Roll on when we got to spend 30k each house for the Heat Pumps etc. to an EPC C in terraced house where can’t get insulation under floorboards with tenant in situ.
But like Mark says, we forget how much properties have gone up in last 2 years. Mine have increased about £2 million last 2 years, but I may never see that as can’t sell the ruddy things if tenants can never move AAAAHHHhhhhhhhh…..