Finding the sweet spot between saving for a rainy day and actually enjoying your rental income is every landlord’s dream for a peaceful and profitable life.

Maintenance and repairs come with the territory of owning a rental home, but a smart approach can really protect your property, maintain a healthy cash flow, and even create happy tenants.

But how much should you set aside each year?

Well, that's the tricky bit, as much depends on a property’s age, type, location and condition. There’s no ‘magic number’, but let’s uncover the right formula for you by delving into the following areas:

Factors that influence your budget.
What exactly are you budgeting for?
Essential protections and costs.
The golden percentage rules.
Building a maintenance plan.

There’s plenty to unpack, so stay right here as we break everything down to keep your rental property profitable, protected, and ready for anything.

FACTORS THAT INFLUENCE YOUR BUDGET

Some rental homes sail through the years with minimal upkeep, while others need more care. To get your budgeting right, it's wise to consider the things that can really impact your costs, such as:

Age: Changes in lifestyles and lettings law impact the need for updates and upgrades, from energy efficiency, to wiring and plumbing, to the age of appliances and fittings.
Type: Freehold houses come with total budgetary control but 100% of the bills, while leasehold flats share expenses among owners but often have additional service charges.
Location: Coastal climates, pollution levels, soil conditions, and areas with harsh weather can all speed up exterior deterioration, particularly on finishes with treatment cycles.

It’s also worth noting that skimping on maintenance can have major downsides, including a reduced rental value and increased repair costs from the extra wear and tear of a higher tenant turnover.

WHAT ARE YOU BUDGETING FOR?

Every home needs some TLC from time to time, and the following costs will inevitably crop up—some annually, others at longer intervals, and some by surprise.

Legal compliance: Maintain valid certificates for gas safety, electrics, energy performance, smoke alarms and CO2 detectors to avoid fines and keep your insurance valid.
Exterior maintenance: Regular upkeep, like maintaining paintwork, pointing and fences, along with winter check-ups for slipped roofing, blocked drains or gutters, and leaks.
Interior improvements: Replacing worn-out kitchen appliances and keeping the decor fresh can justify rent increases, attract higher-calibre tenants, and boost the long-term sales value.

You can’t beat a fresh pair of eyes to prevent small issues from snowballing into costly repairs – that’s why we inspect every home we manage at least twice a year, and recommend you do the same.

ESSENTIAL PROTECTIONS AND COSTS

Beyond the physical upkeep of your property, budgeting for professional help and protection is a wise and sound investment that can really save you headaches when financial or legal issues arise.

Insurance: Safeguard your investment with policies for contents, public liability, emergencies and rental protection to cover against tenant defaults, accidents, and unexpected damage.
Tax efficiency: A skilled accountant will ensure you claim all eligible deductible expenses – well worth a few hundred pounds a year for the time and money savings.
Management: The right agent won’t just save you time and stress – they’ll maximise your income, keep a watchful eye on your property, and take on the legal burden of compliance.

Remember that the cheapest option isn’t necessarily the best, so when you’re shopping around, weigh up the cover, service and expertise on offer, and prioritise your peace of mind and protection.

THE GOLDEN PERCENTAGE RULES

Every rental property has different maintenance costs, but there are some formulas that provide a useful steer, even if they are based on national averages.

Crucially, labour costs vary a lot across the UK, so if you own a rental home in the Wilton & Salisbury area, call us for a chat about setting an appropriate contingency fund for you and your property.

One common guideline is the 1% rule, where you save 1% of your rental property’s value. For a home at today's average UK house price of £291,000, that equates to a £2,910 budget.
The Council of Mortgage Lenders advises holding 30-35% of the rental income. With current yearly rents averaging £15,400, that's about 0.5% of the value of the average house price.
A 2021 Houzz study found owners spent an average of £2,800 on homes 100+ years old, and £1,500 on those below 20 years old. Back then, the average UK house price was £275,000.

Looking at our own experience, we’d say the 1% rule is a reasonable benchmark, but for an outdated or underinsured property, you’ll need a bigger safety net in case of major repairs or unpaid rent.

BUILDING A MAINTENANCE PLAN

Having a maintenance plan for your rental property can really help you stay organised and in control, so here's a quick checklist to keep things running smoothly, even when the unexpected happens.

Schedule and record: Set reminders in your calendar for mid-tenancy inspections, and keep a written log of all repairs and maintenance work.
Prioritise action: Tackle tasks straightaway to stop them piling up, getting worse, and annoying - or even losing - your tenants.
Collect tradespeople: Build strong relationships with trusted contractors, from gas, plumbing and electrics to odd jobs. It’s taken us years, but the result is complete faith in everyone we use.

After years of managing rental homes, we’re in no doubt that a proactive approach to maintenance and gathering a network of professional support is the most effective plan to be ready for anything.

Are You Future-Proofing Your Rental Income?

Tenants will pay a premium for a well-maintained home, so thoughtful planning, realistic budgeting and regular maintenance carried out by reliable and capable contractors will always pay dividends.

That's exactly how we look after our landlords, so if you’d love a proactive managing agent in the Wilton & Salisbury area, call us on 01722 580059 or email us at info@piccoloproperty.co.uk - we’re here to make your life better.