Top Tips for Buy to Let Properties
Friday, 13 May 2011
In today's stressed economy many people are looking for ways to supplement their everyday income. Being a landlord or landlady can be a lucrative endeavour when you let to the right people, as long as you protect yourself with insurance designed specifically for this type of business.
Unless you have let property before you may not be aware that standard homeowner's insurance is not sufficient to cover rental properties. Some insurance carriers will even void your insurance if they discover that your property is not being occupied by you, the owner. Your property is a form of income generation and as such it requires landlord cover.
Landlord insurance ensures that damage done to your property by a tenant during the time they let it from you is catered for. While you may not think you need this type of insurance, you could be threatening your future without it.
There are numerous types of landlord insurance you can choose from and it is wise to discuss your needs with a professional insurance agent. Every policy will offer you different types of coverage.
Deciding what you want to protect in your rental property will help you determine which type of insurance you should invest in to protect your rental. In addition to landlord insurance, you may wish to consider adding a clause in your rental agreement that requires your renters to also carry insurance.
Renter's insurance protects their personal possessions in the event of a catastrophic incident. Replacing their belongings will not fall on your shoulders if you insist that they carry insurance as well.
While many insurance agents will tell you what is included in the landlord insurance, many will purposefully forget to tell you what the insurance does not cover.
You need to be aware of these omissions and make it a point to ask what is not covered when you are considering insurance policies. You will have many things to consider when choosing the right policy and if you keep in mind what is not covered, you will not be surprised if you are required to file a claim and some portions are denied.
There are three types of landlord insurance for you to consider before you invest in a policy. You may decide that you need all three in order to have your property completely protected; however, you may decide that you only need one.
Gather all the information you can about the policy and also discuss your needs with your mortgage lender; they may also require that you carry specific things in your landlord insurance. Until your mortgage is completely paid off and the property title is in your hand, your mortgage lender has a say in how your property is insured.
The landlords building and contents insurance policy will cover any type of structural damage and damage to the contents of the property, especially if you let the property fully furnished. The building insurance portion of this policy will help cover the cost or repairs to your rental or even rebuilding if the damage is that extensive.
When you consider investing in this type of policy, ask your insurance agent if they offer a 'new for old' clause. This type of coverage will allow you to replace old furnishings with new ones before your new renters take control of the property. This option may cost you extra on the policy but it is well worth having.
Landlord liability insurance is a must in today's world, especially when you consider the amount of injury lawsuits you read about. This type of insurance will protect you and your property from most problems although it is advisable to read the wording of the policy carefully.
If you are unsure what the policy covers, ask. Landlord liability insurance will protect you from any claims due to accidents that occur in and outside of your rental property, and it will help provide legal cover if the claim needs to be settled in court.
The last type of landlord insurance that is currently available is loss of rental income insurance. This type of property will help you financially if something happens to your rental property that renders it uninhabitable for a period of time, especially if repairs are being made on the property.
By including this type of insurance in your policy, you can be assured that you will have the rental income needed to pay the monthly mortgage on the house for up to one year.
If you are thinking of investing in property to let, you need to research your insurance options. Rental property is designed to provide you with an income; landlord insurance is designed to ensure that you get that income without any problems along the way.
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