Send to a friend

News

Letting property shouldn’t be taken lightly - 3 January 2012

Your buy to let property may be your first foray into the world of letting so you may be unaware of some of the risks involved in such ventures. Through prudent use of landlord insurance cover it's possible to mitigate against certain future risks and bring peace of mind to your business.

Throughout your ownership your properties need for cash will continue unabated regardless of the whether it is occupied with paying tenants or not. On-going cost may include your mortgage payments, upkeep and repairs, safety testing and compliance, letting agency fees and insurance fees. Therefore having the highest possible rate of occupancy should be the first thing in your mind when planning how to run your business. How attractive your property is to potential tenants is a mix of many factors. Location is obviously very important alongside access to local public transport and, in the case of an inner city property, availability of parking for vehicles. The general standard of the upkeep of the property will have an impact on the type of tenants you can attract and what price bracket in which you can rent your property. Potential tenants can make very quick emotional decisions about where they want to live so improving your properties 'kerb appeal' will have an on-going effect on your ability to quickly engage people. When showing prospective tenants the property make sure that there has been general tidy up of entrance halls and communal areas to show your property in the best light possible and consider applying a fresh lick of paint where necessary.

Your number one priority should be ensuring that a big enough volume of prospective tenants are shown the property as soon as possible so make sure you advertise at the earliest time possible. If you use an agent to get prospective tenants for you then tell them of the vacancy at the soon as possible and stay on top of the process to make sure they are working hard for you.

Once you have your prospective tenant you or an agent should use a tenant referencing service to establish their credentials. Agencies such as these will contact previous landlords to find out the quality of your tenant, whether they paid they rent on time and how well they treated the property. They will also perform a credit history search which identifies defaults, County Court Judgements (CCJ’s), bankruptcies, repossessions and poor payment records.

Another key area to explore is how you are going to protect your investment. Many different aspects of your buy to let business can be insured. These include contents and buildings insurance, cost of rehousing tenants, loss of rent guarantees in the event of damage to the property, property owners liability, employers liability for cleaners etc, and cover for unoccupied properties between lets. Having adequate cover in these areas is a prudent move, protecting yourself from some of the fluctuations in the rental market and mitigating against problems which could stop your cash flow altogether. Make sure you deal with a reputable firm with a history in the market place like Alan Boswell insurance brokers to get the best deal for your money.

To keep up to date on property news and the latest offers, sign up to our monthly newsletter