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Protect Yourself when Investing in Property to Let
As UK house prices continue to rise, buying property to rent out is becoming an increasingly popular investment for people seeking an income and also to build up some pension security for the future.
But it is important for a new landlord to understand both what their obligations are and also how to protect themselves from the various potential problems that can arise from letting property to tenants.
Income may not be steady, as there may be periods between tenancies when houses or flats are unoccupied. Properties or their contents can also suffer damage that has to be repaired.
There are special types of let property insurance designed for landlords and these cover three main areas, two of them similar to those for owner-occupied properties.
They are Landlords building, Landlords Contents and Landlords Liability insurances.
The buildings insurance will cover for any damage to the structure of the property, such as from a fire or a flood, and will pay out to cover the cost of making repairs. It should also cover the cost of needing to rebuild the property in the event of extreme damage.
If the property is let partly or wholly furnished or with kitchen appliances fitted then Landlords Content insurance will be needed. It will cover the cost of replacing or repairing furniture and fixtures such as carpets, kitchenware or electrical items like TVs. It does not cover tenants’’ own possessions.
Landlords Liability insurance is designed to cover for any harm or injury suffered by tenants or their visitors, for which the landlord may be held responsible.
In addition there are a number of extra items that landlords may wish to have covered by their insurance policies.
The most important is Rent guarantee insurance to protect against a loss of income from unreliable tenants, and when the property is empty between tenancies.
Legal expenses cover may also be needed to cover the landlord’s costs if they are involved in a legal dispute with a tenant.
Home emergency cover can also be useful to help get a problem such as the property's supply of gas, electricity, heating or water fixed quickly if it is disrupted.
It is important to check carefully to make sure that any Landlords Insurance chosen covers the things you need it to and also to check carefully in the small print for terms and conditions that may limit the cover or include exceptions.
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