Many people see buy to let as a good investment opportunity. The property itself is an asset that may appreciate while rental payments can provide some income. Over recent years this option has looked a particularly attractive form of saving as interest rates have been kept low to support the economy. The proportion of households reporting income from rent increased from 3.8 to 5.6 between 2010 and 2016 – nearly three times the rates as in the 1980s.
However, there are some additional costs involved meaning it’s important to calculate the right sums or seek expert advice. Recent tax changes and an increase on stamp duty have added to the list of considerations.
One potential pitfall is organising insurance for your new buy to let property. It can be more difficult than organising insurance for your main home, and there could be different restrictions and conditions, as well as your own differing requirements as a buy to let landlord.
A well designed Landlord Insurance Policy will allow for a property that is let to a tenant, to be covered whether it’s occupied or not. This means that if there’s a moderate gap between the last tenant moving out and the new tenant moving in there won’t be a worry about changing policies. If you’re uncertain whether your policy accommodates this check with your provider.
As a landlord, it’s also important to protect your potential loss of income should the worst happen and the tenant is no longer able to stay in the property. Some policies are available to provide cover for loss of rent or temporary accommodation.
If you want the additional protection of legal cover and rent guarantee a good policy will offer these with an extra premium payment. Among other things, this could help if a dispute arises with a tenant and they fail to make rental payments.
When shopping for Landlord Insurance it pays to take your time and make sure that the policy meets your need as a landlord. Investing a bit of time now could save you lots of headaches later – not to mention lots of claims expense.
*The opinions and views expressed in the above articles are those of the author only and are for guidance purposes only. The authors disclaim any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.
Published by: intasure