The average landlord is left with £2,000 from an annual return of £13,000 once the hidden costs of being a landlord are paid for, Howsy has found.
The initial start-up costs of stamp duty (£6,663) and agency fees to find a tenant (£811) cost the average landlord £7,475, before the ongoing costs are considered.
Calum Brannan, founder and chief executive of Howsy, said: “Investing in an area with higher yield is one way to increase profit but you can also squeeze every last penny out of your property by shopping around on things like mortgage rates and which agent to use.
“Today, the sector is ripe with alternative platforms and so you don’t have to be at the mercy of the traditional letting agent and the high fees they charge.
“The new age of letting platform not only costs less where fees are concerned but many platforms, like Howsy, are now offering comprehensive packages designed with security and peace of mind as the motivation, not profit. These packages provide the traditional service aspects with the addition of guaranteed rent and also cover the cost of repairs and maintenance for one small monthly fee.
“All of this can contribute to lower void periods, no rental arrears and an all-round happier experience for tenant and landlord which can be as valuable as the additional income.”
The average landlord experiences 24 days of void periods a year during a tenancy, an average of £535 a year according to Howsy.
Some 73% of landlords buying with a mortgage will see £6,921 paid out in interest as a result.
Based on an average annual rental income of £8,112 divided by the average buy-to-let property cost of £183,278, the average yield available is 4.4%.
Over the last decade, the capital appreciation of bricks and mortar has also averaged an increase of 2.85% a year, £5,223 in monetary terms meaning buy-to-let landlords are seeing a return of £13,343 on their investment.