Property rental is a good business to be in right now. Mortgages are hard to come by and many would-be buyers simply can’t afford to save up enough money for a deposit, so their only option is to rent a home instead. But whilst there is plenty of profit to be made from letting out properties, there is also a lot of risk involved.
Allowing strangers to move into a property owned by you can be fraught with difficulties. There are a million and one things that can go wrong, so whether you are the owner of ten rental properties or just one holiday let, you need adequate insurance cover in place to protect your interests and assets. So what are the main issues that affect landlords?
Accidental Damage to Property
When it’s your home, you automatically take care of the place – if a glass of red wine spills all over the carpet you do everything in your power to remove the stain and when you go out, you lock up. Tenants don’t have the same investment in a property so they tend not to look after it in the same way. They might leave a tap running and flood the place or forget to lock the back door so local wastrels come in and wreck the place. Landlords Buildings Insurance will pay out for damage repair or replacement of possessions once an insurance adjuster has inspected the damage.
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Tenants Refusing to Pay the Rent
The majority of tenants are great: they cause no bother and pay the rent on time every month. Unfortunately, no matter how diligent you are about performing background checks and contacting referees, one or two bad tenants will slip through the net and secure a tenancy in one of your properties. If a bad tenant refuses to pay the rent, it can take up to six months to have them evicted. This is six months of no income, which if you have mortgage re-payments to meet could be catastrophic. Landlords insurance will cover you against this risk.
What would happen if a tenant tripped up on a step and broke a leg, or they picked up an infection as a result of living in a damp house while you organised a plumber to fix the burst pipe? They could just chalk it up to a bad experience, or they might decide to sue you. If you do end up facing a law suit, it could be a costly business, but a landlord’s liability insurance policy will protect you if this does happen.
Unwelcome House Guests
Landlords insurance is vital if your tenants decide to sublet the property to other people, or invite a whole host of friends and family to move in without permission. With a decent policy in place, you will be able to evict unauthorised tenants quickly and regain possession of your property.
Insurance is essential for landlords, so don’t make the mistake of letting out a property without a comprehensive insurance policy in place.