Investing in the buy-to-let property market may not be as profitable as it once was, but more and more people are recognizing its financial potential. Rather than putting money in a bank or building society, buying into bricks and mortar is considered to be a better long-term option.
According to the Council of Mortgage Lenders (CML), buy-to-let lending in the UK hit its highest level for nearly five years in the second quarter of 2013. Although some were taking the opportunity to re-mortgage their properties, landlords reported strong demands from tenants requiring somewhere to live.
While the market looks to be gaining momentum, it is vitally important for landlords to recognise the difficulties associated with renting properties as well as the financial benefits.
Luckily, there are various policies available to property owners that can help protect their most valuable assets. So here is a quick run through of some essential cover for landlords.
In nearly every instance, particularly if you have a large mortgage, buildings cover is considered to be the most important cover for landlords. This will provide protection against the structural elements of a property from fire, floods and subsidence.
What’s more, permanent fixtures and fittings like baths, toilets, fitted kitchens and wardrobes are also covered. Other property aspects such as garages, greenhouses, sheds, walls and fences may be protected, but this will depend on your policy.
If you rent out the property unfurnished, then this type of cover might not be applicable. However, if you furnish the house with items like curtains and carpets, contents cover is a good idea.
The possessions and belongings of your tenants are their responsibility. But it might be a good idea to suggest appropriate protection to the property of occupants for added peace of mind.
Boiler and Central Heating System Cover
One of the most important aspects of any property is the boiler and central heating system, as no tenant will want or expect to be without warmth for a prolonged period of time.
While this is sometimes covered by standard home protection policies, it is highly recommended to take out a separate comprehensive level of cover from a dedicated provider. This is likely to include boiler breakdown cover, a free annual service plus unlimited call outs amongst other benefits.
Landlord Liability Cover
In recent years, there have been an increasing amount of personal liability claims made against organisations and individuals. Potentially, one of your tenants could blame an accident or injury on an aspect of the property, for example, a loose floorboard or broken patio.
Therefore, landlord liability cover will provide protection against these kinds of claims in the unlikely event of an incident. You may also be interested in taking out legal cover, which will cover the cost of any lawsuits with your tenants.
Rent Guarantee Protection
If you require rent from tenants to cover the cost of mortgage repayments, then a steady and reliable income is imperative.
Thankfully, rent guarantee cover exists if the property occupants are, for some reason, unable to keep up with payments.