2011 set to be a great year for landlords
Landlords today would rather earn a steady and guaranteed income each month than have to worry about house prices. In 2010 we saw average house prices drop month on month, placing many homeowners into negative equity and luring many first time buyers into the market.
Unfortunately for many of these potential first time buyers, they were unable to get on to the property ladder as the lending criteria of the mortgage lenders became even stricter. This has now led to a surge in the rental market. "This will be a good year to become a landlord." said Kate Faulkner from the website designs on property.
For prospective landlords, it pays to be aware of the risks involved and be sufficiently covered. A simple building and contents insurance policy will not suffice, therefore you will need a specialist landlords insurance policy to protect both your property, its contents and your rental income. Using an online comparison site such as Moneysupermarket.com will help you find the best level of cover at the most competitive price.
So what’s involved then?
When accessing you, insurers will usually take into account the following criteria:
- The type of tenants living in the property
- How old the property is
- The type of property
- The location of the property
- How many claims have been made in the past
- The cost of the building to be rebuilt in the event of total loss
It is important that you read the terms and conditions of the policy you are most interested in to make sure that it covers all your needs. There is no point in opting for the cheapest option if it leaves out a vital piece of cover that will cost you later in the event of an accident.
Along with the basics, a landlord insurance policy will also include some extra added benefits.
- Legal Expenses – In the event that you need to take a tenant to court for refusal to leave, debt recovery or a refusal to pay rent then this will cover those expensive legal costs.
- Rental Protection – In the event that a tenant refuses to pay or even when your property is empty between tenancies, this protection will guarantee that you still get paid your rental income.
On a typical £100,000 property, a landlord can expect to receive up to £5000 in rental income each year, so it is essential that you protect this income.
