Over the last 10 years more than a million British people have become landlords. Apart from choosing the best investment property as a landlord there are many steps after this which are crucial to making a full success from your investment. Some of these are how you attract tenants, fulfilling your legal obligations, choosing the best landlord insurance and understanding how to deal with tenants over time.
When it comes to attracting tenants do not become over-relaxed because you know that rental demand is increasing. Ensure that the property is spotlessly clean and in the best condition. It is worthwhile giving it a facelift with a neutral colour of paint; not only does this make it more attractive to potential tenants but also gives them the feeling that you will be a good landlord.
Go a step further as some professionals would by adding in touches such as fresh flowers and candles, and even the smell of fresh coffee or freshly baked bread which will make the property homely. If you currently have tenants in the property then ask them to do you the favour of ensuring it is clean and arrive in plenty of time to check the property yourself and make any necessary adjustments.
Be realistic about the marketplace. Do plenty of research on the internet, speaking to agents and looking at local newspapers in order to define your asking price for the rent. This way when you have suitable tenants who express interest you can be confident that you are getting a fair price. If your prospective tenants have done their research they will know it is a good price.
Regarding the legal obligations which you need to fulfil the first step is to inform the mortgage lender of your intention and if the property is leasehold you must also get permission from the freeholder.
You must hold an energy performance certificate if you are renting your property to new tenants. This certificate shows the energy efficiency of the property, it costs £70 approximately and will last for two years. Also bear in mind that if the property is to be let furnished then the furnishings have to comply with fire and safety regulations. Any electrical appliances have to be checked regularly by a qualified electrical engineer and the same applies to gas appliances which must be checked by a Gas Safe registered professional.
When you find tenants you then have to have an assured short-hold tenancy agreement prepared as well as finding a tenancy deposit protection scheme as landlords are no longer allowed to hold onto deposits. Legally you have to inform the tenants within 14 days after taking the deposit with the details of the scheme. Apart from honouring your legal obligations it is also advantageous if you were to have a dispute with tenants in the future, as landlords who do not sign up for the scheme find it harder to evict tenants if necessary.
In order to be fully up to date it is best to join the National Landlords Association or a local authority landlord accreditation scheme.
When choosing landlord insurance do not be tempted to opt for a cheap landlord insurance which may not contain all aspects of cover you could need. Although you want to get a good deal you also need your investment to be sufficiently protected. The best landlord insurance policy to opt for is a comprehensive landlord insurance which should include that all types of tenants can be accepted, loss of rent cover, property owners’ liability up to about 5 million, full accidental damage and terrorism cover.
When dealing with tenants the very first thing to do before signing an agreement is to do a security check on potential tenants which will verify that they are who they say they are and that they will be able to pay the rent.
As early as the viewing stage it is important to make personal contact with prospective tenants. You will feel more comfortable yourself by doing this and even if you have chosen to use a letting agent you should still do this. When you have tenants in your property build a positive relationship by supplying them with relevant guides to the property and its’ appliances as well as any local information if applicable. Make sure they have any emergency numbers as well as your own contact details.
Treat your tenants with respect and they are more likely to respect you and your property. Respond to any needs quickly and sort out problems which may arise immediately.
What about using a letting agent? This depends upon your own circumstances as to whether you feel it could be worthwhile. Letting agents can find and vet possible tenants, prepare agreements, do inventory and condition reports, organise the changes to council tax and utility bills and collect rent to pay into your account. On average they will take 11 per cent of the total rent as a fee. They can offer additional management services such as maintenance, redecoration, paying of bills on behalf of the landlord for an extra 6 per cent.
This choice will depend to a great degree on how much time you have as well as the financial implications. However if you follow these guidelines on preparing the property for viewing to attract tenants, how to treat tenants, the legal obligations and sourcing the best landlord insurance you will make a success of being a landlord.
Wednesday, December 9, 2009
Friday, June 26, 2009
Tips for Finding the Best Landlord House Insurance
We have put together some tips for finding the best landlord house insurance based on some of the experiences and questions we have had over the years.
A classic insurance mistake -
Probably one of the classic situations is people who want to save money, and cut corners on telling the truth.
This is a big mistake! When buying your landlord insurance be aware that the whole basis of the insurance industry is based on utmost good faith. This means that whatever you choose to tell your landlord house insurance brokers will be taken at face value, which may seem fine at the time but not so good if you need to claim.
When it comes to a claim this is when the insurance company will come and assess the situation, very thoroughly, and if by any chance you have been in any way untruthful then the entire policy could become null and void.
What you really need to be aware of for your landlord house insurance-
As a landlord insurance policy you are really looking to insure the rebuild cost which needs to be based on an up to date evaluation. It is your responsibility to make sure that the property has adequate cover and it can be worthwhile to consider to get a chartered surveyor to provide a quote to ensure that adequate cover is taken out.
If you have a very recent evaluation report this is not necessary, but make sure to cover yourself as if it is undervalued you will only be paid on this undervaluation in the instance of a claim.
Consider in detail the overall policy not just the upfront cost. Excesses can vary from policy to policy, and will affect the premium due. So you need to calculate in the event of a claim that you would be happy to pay the excess and even more so if you are taking out a policy for a block of apartments. Remember if you are new to landlord insurance that your tenants may not have the same careful habits as you do.
Take the time to get a few quotes -
So that you can carefully compare what appears to be like with like, and check the Key Facts document that is a legal requirement from the FSA. Doing it this way you will see what cover you get for your price.
Should I choose a household name?
A lot of people feel more comfortable with a household name however the reality is that there are a variety of specialised landlord house insurance brokers who have excellent working relationships and have negotiated great deals with some of the household names.
Remember to check the Key Facts document, and if in doubt you can always check out a company on the FSA website. A source which is useful if you want to confirm and calculate your rebuild costs is the Association of British Insurers, if you have any doubts. But you need to remember that their calculator will not be suitable if you need to insure a block of flats or properties that are in some way unusual.
A classic insurance mistake -
Probably one of the classic situations is people who want to save money, and cut corners on telling the truth.
This is a big mistake! When buying your landlord insurance be aware that the whole basis of the insurance industry is based on utmost good faith. This means that whatever you choose to tell your landlord house insurance brokers will be taken at face value, which may seem fine at the time but not so good if you need to claim.
When it comes to a claim this is when the insurance company will come and assess the situation, very thoroughly, and if by any chance you have been in any way untruthful then the entire policy could become null and void.
What you really need to be aware of for your landlord house insurance-
As a landlord insurance policy you are really looking to insure the rebuild cost which needs to be based on an up to date evaluation. It is your responsibility to make sure that the property has adequate cover and it can be worthwhile to consider to get a chartered surveyor to provide a quote to ensure that adequate cover is taken out.
If you have a very recent evaluation report this is not necessary, but make sure to cover yourself as if it is undervalued you will only be paid on this undervaluation in the instance of a claim.
Consider in detail the overall policy not just the upfront cost. Excesses can vary from policy to policy, and will affect the premium due. So you need to calculate in the event of a claim that you would be happy to pay the excess and even more so if you are taking out a policy for a block of apartments. Remember if you are new to landlord insurance that your tenants may not have the same careful habits as you do.
Take the time to get a few quotes -
So that you can carefully compare what appears to be like with like, and check the Key Facts document that is a legal requirement from the FSA. Doing it this way you will see what cover you get for your price.
Should I choose a household name?
A lot of people feel more comfortable with a household name however the reality is that there are a variety of specialised landlord house insurance brokers who have excellent working relationships and have negotiated great deals with some of the household names.
Remember to check the Key Facts document, and if in doubt you can always check out a company on the FSA website. A source which is useful if you want to confirm and calculate your rebuild costs is the Association of British Insurers, if you have any doubts. But you need to remember that their calculator will not be suitable if you need to insure a block of flats or properties that are in some way unusual.
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