I've been looking at a small flat in Manchester that seems like decent value, but I'm trying to work out if the rental income will cover the mortgage, council tax, and maintenance. What am I missing from my calculations?
You're probably not factoring in void periods when the place sits empty between tenants, plus property management fees if you're using an agent, insurance, and those surprise costs like boiler breakdowns that always seem to happen at the worst times. Run the numbers assuming you only get 85% occupancy and set aside like 10% of rental income for maintenance - that's what actually happens in real life, not the best case scenario.
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