September 9, 2026
The cost of buying an investment property goes well beyond the deposit.
Investors also need to account for Stamp Duty, legal and mortgage fees, surveys, refurbishment and the ongoing costs of owning a rental property. Failing to budget for these expenses can turn an otherwise attractive investment into a financial strain.
If you are considering property investment in the UK, understanding the complete cost before making an offer is an important part of assessing whether the property fits your investment strategy.
If you are using a buy-to-let mortgage, you will normally need a larger deposit than you might for a residential mortgage.
A 25% deposit is often a useful starting point when planning a buy-to-let purchase, although the amount required will depend on the lender, property and applicant.
For example:
Property price: £120,000
25% deposit: £30,000
The important point is that the £30,000 deposit is only the beginning. You will need additional capital for the costs associated with completing and preparing the purchase.
A mortgage broker can help establish how much you may be able to borrow and which products are appropriate for your circumstances.
Stamp Duty Land Tax can represent one of the largest upfront property investment costs.
In England and Northern Ireland, buyers purchasing an additional residential property generally pay the higher SDLT rates. At current rates, the first £125,000 of a qualifying additional-property purchase is charged at 5%, with higher rates applying to subsequent bands. Certain non-UK residents may also pay an additional surcharge.
For an additional residential property purchased for £120,000, this would currently mean £6,000 in SDLT, assuming the buyer is subject to the standard additional-property rates.
Individual circumstances can change the amount due, so investors should check the latest rates and obtain professional advice before purchasing.
Several smaller costs can add up during the buying process.
These may include:
Do not confuse a lender’s valuation with a property survey. A mortgage valuation primarily helps the lender assess the property as security for the loan. An appropriate survey can provide the investor with more information about the condition of the building.
These checks can help identify problems that could otherwise become expensive after completion.
Some investment properties will be ready to let immediately. Others may need decorating, repairs or more extensive refurbishment.
Potential costs include:
Where possible, these costs should be estimated before the property is purchased.
An apparently inexpensive property may no longer represent good value if significant refurbishment is required before it can generate rent.
Our guide to important property investment factors explains why condition, maintenance and wider investment considerations should be assessed alongside the purchase price.
Budgeting does not stop when the purchase completes.
Typical ongoing property investment costs can include:
Landlords also have ongoing responsibilities for keeping rented properties safe and maintaining relevant gas and electrical equipment.
These expenses should be included when calculating the likely net return from a property rather than relying only on the advertised rent or gross rental yield.
Even a well-selected rental property will not necessarily produce rent every month for the entire period you own it.
There may be gaps between tenancies, unexpected repairs or larger costs such as replacing a boiler or carrying out essential building work.
Investors should therefore retain a suitable cash reserve rather than using all available capital for the deposit and purchase costs.
The amount required will depend on the property, mortgage commitments and the investor’s wider financial position.
Consider a simplified example of an investor buying a £120,000 property in England:
| Cost | Illustrative Amount |
| 25% deposit | £30,000 |
| Stamp Duty | £6,000 |
| Legal, survey and finance costs | £2,000 |
| Initial refurbishment | £5,000 |
| Contingency | £2,000 |
| Estimated capital required | £45,000 |
These figures are illustrative rather than quotations, but they demonstrate an important point:
A £120,000 investment property requiring a £30,000 mortgage deposit could require substantially more than £30,000 in available capital.
The exact amount will depend on the buyer, financing, property condition and work required.
For a broader look at planning your first purchase, read our UK property investment guide.
Before making an offer, make sure your budget considers:
Looking at the complete investment cost makes it easier to compare opportunities and understand whether the expected rental income justifies the capital required.
Seven Keys looks beyond the advertised purchase price when assessing an investment opportunity.
We consider realistic rental income, property condition, refurbishment requirements, local demand and likely ongoing costs so investors can make a more informed decision before purchasing.
If you are actively looking for an investment property, complete our investor enquiry form to tell us about your budget and investment requirements.
Alternatively, contact Seven Keys to discuss your property investment plans with our team.
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