Buy-to-let property insurance, some times also known as residential property owners insurance, is needed if you own houses and/or flats to tenants ? either on a short-term or long-term basis. Ordinarily you can buy cheap buy-to-let property insurance in the event that you rent five or less properties in the UK than is the case if you rent more than five properties, as in the case of the former you are seen as a small time landlord with a small business, whereas in the latter you are seen as a full blown property-owning company.
Whether you plan to rent five or less properties, or five or more properties, is, however, a side issue, as in both cases you'll need to ensure that you have at least the minimum level of required insurance in order to protect yourself. Consequently, the number of properties you own will have a bearing only insofar as the insurance premiums are concerned. That said, if you are looking to become a property owner with a letting business, then you need to ensure that you have the following minimum provisions in your insurance policy:
Fire
Insuring against any fire on the property
Natural Disaster (also known as tempest insurance)
Insuring against natural disasters that may occur, such as a storm where the winds tear off your roof or guttering
Theft
Which is especially important if you are renting out fully furnished properties. In the event that you are renting out unfurnished premises, you may wish to have a discussion with your tenants about whether or not they should have home contents insurance
Public Liability Insurance
This should be a must as it will protect you against any claims your tenants or any third parties (such as their guests) may have for injuries they suffer while on your property
Lost Earnings
There may well be times when your property remains empty; say, for example, while you look for new tenants. If you are relying on the rental income from your tenants to repay the money you borrowed to purchase the property, you need to ensure you have lost earnings insurance to compensate you during this period
Employee Liability Insurance
If you have employees who will visit the property for you to repair any damage, etc. or to collect the rental payments, then you need to make sure that you have employee liability insurance in case they get injured while carrying out their assigned task
Legal Expenses Insurance
As a property owner you may find the need from time to time to retain the services of a lawyer; for example, if your tenants refuse to pay their rent or move out of the property at a specified agreed time ? when you may need to get an eviction notice. As legal expenses in the UK can be expensive, you should consider insuring against this risk by having in place a provision of legal expenses in your insurance policy.
Although the above are basically the bare minimums you need in your buy-to-let property insurance policy, you can also tailor these types of insurance policies to meet your particular needs, so make sure that you talk through your circumstances with your insurance provider, especially if you anticipate expanding the business in the near future.
Buy To Let Property Insurance
Over the last 15 years there has been a dramatic rise in the number of people who choose to invest in property for the purpose of renting. Buy to Let sales have become much more common. It is believed renting has become very popular among tenants due to the flexibility and freedom it offers, without the commitment of buying a home. For many, purchasing and letting property has become a very profitable investment. They provide a steady, reliable income as well as a steady rise in value of their property. The income from renting property should be enough to cover the landlords mortgage payments and make a profit.
Initially it appears that property investment and rental is a flawless way to a steady income and security but property management can be a complex area with its own set of risks and pitfalls but with the right knowledge and approach it can be very rewarding. Letting agents are a good way to have your property professionally managed for a small cost. They will generally take 10%-15% of your monthly rent, plus a one off management fee and will take care of all aspects of managing your property from arranging marketing, web site advertisements and property signboards, supervised viewings, credit checks, tenancy agreements and inventories, collection of rent, property inspections, and possibly a 24 hour emergency contact.
Reasons for Rental Popularity among Tenants
For tenants, renting has become a more flexible and attractive alternative to buying. There are several benefits that property renting can offer tenants. With job insecurity, many people now fear having the commitment of mortgage payments in the event they are suddenly out of work. It allows co-habitation of couples without the difficulties of a mortgage if there is a split. Divorce rates have become much higher in recent years and with an ageing population where people are living longer, there is more demand for homes for people living alone. Getting onto the property ladder for first time buyers has become more difficult than ever, leaving some young buyers with no other option but to rent.
Reasons for Rental Popularity among Landlords.
For landlords, investing in property can provide a secure and steady income alongside an existing job or an alternative to other forms of savings and investment. Property rental in the UK has steadily become more accepted in the last few years, catching up with places with more established industries like Europe and the US. The demand for rental property is strong and with the guarantee that the landlord can have the property back at any time, as well as charge reasonable rent is very appealing. The option of Buy To Let mortgages has provided a profitable alternative to building societies, stocks and shares with far less chance of losing your money.
More Properties
Many landlords start their property rental investment with one property as a sideline income while keeping another job. However, this has led many to take on more properties, with some eventually owning a full portfolio, which can support them financially. Another area of investment which is rapidly gaining popularity is commercial property. Property management and Buy To Let is generally associated with flats and homes but with towns and cities full of shops and offices, the opportunity for investment in these areas is also being noticed.
With property investment comes a level of risk. The risk with property however, compared to the reward is far lower than the stock market, with a higher return than savings and building societies.
Andrew Munro has sinced written about articles on various topics from Property Guide, Property Investment. Andrew Munrohttp://www.youlet.co.uk. Andrew Munro's top article generates over 1300 views. to your Favourites.
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