Landlords choose to invest in properties to get returns over a certain period of time. Becoming a landlord is one of the best ways to grow your wealth long term, but there are some important things you need to consider to make sure it doesn’t hamper your growth. Here we have listed some of the most important things that landlords need to consider to keep their property secured:
Most of the homeowner’s insurance policies don’t cover rental properties in standard coverage and this is exactly where landlord insurance comes into the picture. It offers landlord’s basic coverage along with a few key differences. Rental properties are the ones that face higher liability claims as compared to primary residences and this is the reason why landlords need to focus on increasing their liability coverage. The landlord insurance also offers you coverage for loss-of-income in the standard policy or you can take it as a rider. In some exceptional circumstances, you can opt for umbrella insurance that offers landlord protection above their existing cover. The cost of umbrella insurance policy is quite affordable as it can protect you from having to pay out.
Most of the landlord insurance policies cover property owner’s liability insurance and building insurance. You have an option to add some other types to your policy including tenant default cover, accidental damage and landlord’s contents insurance. Though landlord insurance is not a mandatory requirement in the UK, most leasehold agreements and mortgage lenders ask you to have buildings insurance. If you are planning to rent out your property then your basic home insurance policy will be invalid and you need to apply for landlord insurance. The amount of sum insured will depend upon the things you want to cover in your policy.
Most landlords think that it’s fine to let their property to tenants without taking any advanced deposit. This puts landlords in a lot of financial risk, as they will not be covered for any form of property damage, theft or loss of possessions. Tenancy Deposit Protection offers landlords amazing financial security as they are covered in the process of disputes, deductions and deposit returns. A security deposit is capped at five week’s rent for most properties.
In the UK, there are three different deposits scheme available – Tenancy Deposit Schemes, My Deposit and Deposit Protection Service. In order to safeguard the deposits, landlords have the option to choose a particular scheme according to their preferences. However, they should notify their tenants about the scheme within one month of receiving the deposit. After the end of their tenancy, landlords have to return the estimated deposit to tenants within a stipulated period of time.
Most landlords require special protection and you need to speak to a letting agent or insurance specialist who can offer you the right advice considering your personal circumstances. Once you enroll for any form of landlord protection, make sure you keep all the documents updated and well organised to facilitate a smooth claiming process if needed. Still not sure which is for you? Book an appointment with our lettings team today.