If the mere mention of the
word “insurance” makes you want to nod off, here’s a quick hack to focus your
mind.
Ask yourself this question:
what’s the worst that could happen to your property investment?
Is it a flood, a fire,
squatters, or a tenant tripping on a wobbly floorboard and suing you for every
last penny? I bet you feel wide awake now.
Hopefully, none of these
scenarios ever become a reality for you. But sometimes in life, the worst does
happen – hence the need for insurance.
Landlords are not legally
required to have insurance, but it’s a condition of most buy-to-let mortgages.
Standard home and contents policies don’t cover tenancies, so specific landlord
insurance is needed.
You can get policies which
cover all sorts of eventualities, but the broader the cover, the bigger the
premium. Here’s a rundown of the most common types of insurance.
Landlord Liability Insurance
This covers you if a tenant
says your property caused them an injury. For example, if they trip on faulty
wiring or fall down the stairs due to a broken bannister.
Buildings Insurance
Protects the actual building
in the event of fire, flooding or vandalism.
Contents Insurance
Covers contents such as
furniture, appliances and carpets in the event of theft, fire or flooding. It
only covers your items; tenants need to insure their own belongings.
Accidental Damage
Covers things likes holes in
the walls and spills on the carpet and is usually added to contents insurance.
Loss of Rent
If your property is
uninhabitable due to fire or flood, a proportion of the rent is covered.
Legal Expenses
Insurance
Covers you if you wind up in
a nasty legal dispute over an eviction or unpaid rent.
Rent Protection
Covers you for a certain
amount per calendar month, if a tenant doesn’t pay their rent.
General Cover
Most landlord insurance
covers property liability, buildings insurance, contents and loss of rent. You
can then add in (at a price) extra coverage, depending on your
circumstances.
Always do your research and
read the fine print before you commit to a policy. Also, get advice, to ensure
you don’t leave yourself exposed.
A Word of Warning
Understandably, landlords
worry about tenants damaging their property, but often the most significant
risk arises when a property is empty.
Vacant properties are a
target for vandals, squatters, arsonists and thieves. This is why many
insurance policies become invalid if the property is empty for more than two
months.
The best protection is to
manage your property well, and this is where a good lettings agent becomes
useful.
An insurance policy is your
last resort in the event of a disaster.
An experienced, responsible
letting agent is a proactive force, that can ward off disaster in the first
place.
A letting agent should be
able to:
– help you find a reliable
tenant, so there’s less risk of damage.
– keep on top of maintenance
issues to prevent accidents.
– head off problems with
rent arrears before a case reaches court.
– market your property professionally,
so it’s not vacant for long.
It’s impossible to predict
the future but having a good letting agent working for you is a wise way to
protect your property
If you are an existing
landlord or someone thinking of becoming a first time Retford landlord looking
for advice and opinion and what (or not to buy in Retford), drop me an email or
phone call and let’s start a conversation – I don’t bite and I don’t do hard
sell … and maybe, just maybe, I could help you get better returns from your
property portfolio.
I’m always happy to help sellers, buyers, landlords
and tenants
Tel: 01777 237310 or messages to 07981 744003
Follow me on Facebook
https://www.facebook.com/thegoodestateagentnorthnottinghamshire
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