The UK’s rental market growth is at its highest level for 13 years according to Zoopla.
While this demand varies from region to region, cities like Manchester and London are far outpacing much of the country for example, a return to growth means it’s a great time to become a landlord. Not that it’s an easy thing to do. There’s a lot of work, a lot of time and money, a lot of admin, and a lot of risk involved in being a landlord.
Despite all its upsides, it’s not just a case of investing in a few properties and watching the money roll in.
One area in particular you should be careful about as a landlord, is making sure you have the right level of insurance for your properties and contents. Landlord’s insurance is a specialist product and it can be complicated to navigate if you’re new to it. But you have to get it right if you’re going to protect your investment from potential loss or damage.
Here’s a quick guide to the basic types of insurance you should get as a landlord.
Landlord building insurance works much like regular building insurance. It provides landlord’s with cover for costs to replace or repair their property if it’s damaged by environmental accidents like fire or flooding. It can also cover them for damage or loss due to vandalism or theft – and that includes from tenants (whether the damage is accidental or intentional).
Alongside property protection, as a landlord you should get insurance that will also cover your contents for loss or damage.
This won’t cover you for general wear and tear, but it will protect you if your contents (like furnishings and furniture) are damaged by tenants, stolen or damaged due to fire or flooding. As a landlord you can also insist that tenants take out insurance for their own contents that they bring into your property, but you should definitely make sure you cover yourself.
There’s a lot that can happen which means a tenant falls into rental arrears. But just because they’ve fallen on hard times, doesn’t mean you should suffer or miss out on rent you’re entitled to. Rent guarantee insurance ensures you can continue to collect rent for a specific time period when your tenant can’t pay.
If you need to start legal proceedings to evict a tenant who’s unable to pay their rent, rent guarantee can help cover your costs.
Unoccupied property insurance
Depending on your rental strategy, you might find yourself with a rental property that sits unoccupied for extended periods, and longer than a typical property insurance will accommodate.
This is particularly true if you’re planning to invest in student lets. You’ll often find yourself with an unoccupied property during holidays and in the summer while you’re waiting for new tenants to move in. If you don’t have unoccupied property insurance, you’ll likely lose your cover after 30 to 60 days of unoccupancy.
Make sure to protect your investment as a landlord
Investing in rental properties continues to be one of the best returning options for your money. But if you are going to take the plunge as a landlord, it’s critical you take the steps to protect your investment. And that includes insuring your property and contents against loss or damage.
Failing to do so could result in significant repair or replacement costs that could put a dent in your returns.