If you own a property, then you need to make sure you do all you can to look after it. The bricks and mortar in your possession is a big asset, provided that it’s maintained. This can be a challenge when you own and live in the property but buy-to-let investors have to be even more careful.
As a landlord you are likely to have an arm’s length relationship with the house you own, which makes it even more vital to protect yourself with insurance. It’s important to read up on what insurance providers offer and ask yourself the following question: ‘am I protected if the worst should happen?’.
Loss of rent that leaves you out of pocket
We might define ‘the worst’ in different ways. If you have invested in a property in order to secure a steady rental income, then losing this income can cause problems and leave you out of pocket. This could easily occur, however, if your tenant decides to leave and you can’t find a replacement or if your tenant falls into arrears. Rent arrears is, according to the Money Advice Trust, the fast growing debt problem in the UK.
With that in mind, you can protect yourself with a policy that will keep your money coming in regardless. Search for this so that you can get some degree of certainty over your investment.
Issues with your tenants
It’s said that landlords are out of pocket to the tune of £5 billion every year as a result of rent arrears and damage caused by tenants. Yet, while rent arrears aren’t insignificant, the vast chunk of that amount – £4.5 billion – is related to damage caused by the tenants themselves. Whether it’s appliances, furniture or carpets, these can be expensive items to pay for out of the blue.
At worst, you might even find yourself requiring legal support to settle a dispute with a tenant who refuses to pay what they owe. It might seem negative to think about this, but you’ll have peace of mind if you’re covered for any damage or disputes that arise over your property.
There’s a third ‘worst case scenario’ to consider too, and that relates to emergencies that are out of your control. Flooding, boiler breakdown or storm damage are three things that could leave you with a big repair bill in the short term and even harm your asset in the medium to long term too. The average cost, for example, of repairing a three-bedroom house that has suffered flood damage is £30,000 according to RICS and this could all take several months to carry out and return the home to a state in which it could earn you a rental income.
If you’re covered against the loss of rent, damage and disputes relating to your tenants and any one-off emergencies that may just pop up out of the blue, then you can safely say you are prepared for the ‘worst’.