Investing in property can be quite a lucrative and profitable business. Finding the right house in the right location will be the most important aspect of entering into the buy to let market and once you have purchased the property, you can then get to work on the other aspects of becoming a landlord. Will you furnish the property or leave it unfurnished? What tenants are you interested in pursuing, a family, a young couple or is your property more suited to students?
One thing that you do need to consider is both your tenants and your investments safety. It is estimated that in our lifetime, one in three of us will have our property broken into. This is a scary figure especially if you own three properties. Having a comprehensive landlord insurance policy will protect your investment and its contents if you have furnished it however you should encourage your tenants to take out a separate contents insurance policy to cover their own possessions.
Unfortunately, people living in major cites like London, Manchester and other affluent areas are a target for criminals, showing that regardless of which side of the North/South divide you live on, there is always a risk that your property could become the victim of theft.
Surprisingly, over a fifth of households in the UK still do not have any form of insurance according to housing charity Shelter. Without insurance, owners and tenants are left to foot the bill themselves to the tune of a combined £200 million a year to replace missing items and damage to their properties.
More worryingly, those who have opted for a cheaper form of insurance and believe to be covered are being left out to dry in the event of a claim as research has shown that on average homeowners are under-insured by £4,650. At a time when people are feeling the pinch, it is easy to assume a standard insurance policy will be enough however this could be a mistake. Knowing the difference between the frills and no frills policies is crucial; many standard policies will provide a basic level of cover, which in many cases might not safeguard your property and its possessions to the necessary extent.
Steps can be taken to not only make your property less attractive to the criminal element but also to help reduce the cost of your annual landlord insurance policy. Install a home security system. This can be anything from security lighting to a professionally maintained alarm system. Regularly check the state of the locks and replace older, weaker locks with new and more secure locks on all doors and windows. Install double glazing, which will not only save the tenants or you money on the energy bills but also secure the property and help reduce the cost of your insurance premium.
Have you had your property broken into? Why not share your story with us?
Thanks to Stefan Mustieles at Money Supermarket for this interesting article.