With recent changes in regulations and unstable house prices, is property still a good investment?
If you’re looking for a long-term investment, buy-to-let property can still provide rewarding returns.
We explore the benefits and drawbacks of buy-to-let investments to help you decide whether expanding your portfolio or becoming a first-time landlord is still worth the risk.
Buy-To-Let Investment: The Risks
We would be lying if we said investing in property was completely risk-free. It’s important to understand the risks involved before making any big investments.
Here’s a look at some of the potential risks currently facing the buy-to-let sector;
Unstable Property Prices
With Brexit on the horizon, no one can be entirely certain what the after-effects will do to the UK property market. If house prices fall, you may lose out on money if you decide to sell.
However, this works both ways. If the property market experiences an uplift post-Brexit, as it often does after slow periods, your investment worth could grow by a significant amount.
Stamp Duty Changes
The changes to stamp duty made in 2016 mean that landlords now have to pay up to 3% more on buy-to-let properties. This can greatly increase your initial outgoings so needs to be factored into the decision-making process.
However, this doesn’t apply to first-time, buy-to-let buyers who can pay the standard home mover rates instead.
Reduction to Tax Relief
A new tax system is being phased in, and by 2020, buy-to-let landlords will no longer be able to deduct any mortgage interest payment from their rental income before paying tax.
These changes mean most landlords will be paying higher tax on their rental properties and may even find they move up a tax bracket.
Void Periods
Unfortunately, void periods can happen, and are sometimes out of your control. Extended void periods can negatively affect your annual returns and are best avoided.
To prevent void periods, there are some simple steps you can take;
- Invest in quality marketing
- Keep up with maintenance
- Think about your target tenant
- Ensure compliance with current health and safety obligations
Investing in Residential Property: The Rewards
When you get it right, buying residential property to rent can still be a profitable investment. Here, we explore some of the benefits;
HMO Properties: Higher Rental Yields
Investing in an HMO property is a good way to see larger returns on your investment.
An HMO property is shared by multiple people or ‘households’, and according to Property Investment UK, can provide rental yields up to three times higher than single lets.
With the demand for shared housing continuing to grow in cities and student towns, investing in property with the idea of renting it as an HMO remains a solid investment.
Location: Maximising Returns
When looking for a stable investment property, location remains key.
While larger cities in the North such as Manchester and Liverpool are currently experiencing an uplift in local housing markets, some areas of London are slowing down.
Finding the right rental market in an up-and-coming area will improve your chances of enjoying a higher rental yield.
For example, properties in larger University towns make a great investment for student landlords as there is a steady supply of students looking for housing.
To get a better idea of where to invest now, the following areas have been tipped as providing a solid investment;
- Northampton
- Leicester
- Manchester
- Leeds
- Newcastle
- Nottingham
Look for areas with a younger population who haven’t yet stepped a foot onto the property ladder and areas with good transport links into popular areas.
Long Term Rewards
As long as you’re willing to exercise patience, investing in buy-to-let property still brings with it worthwhile, long-term rewards.
The security of a steady income flow and the possibility of inflation provides a solid return on investment and a safety net for retirement.
The Brexit Effect: Should I Be Worried?
Due to Brexit uncertainty, many people have delayed selling or buying a home. But that shouldn’t necessarily put you off investing in buy-to-let property.
The UK population is growing, and people still need homes to live in. In fact, as first-time buyers are thinking twice, the demand for renting may even rise in the short term.
Although it’s hard to predict, unstable house prices and rising mortgage rates could result in a higher number of people looking to rent, allowing private landlords to enjoy a stable rental market.
Either way, the residential property market continually experiences ups and downs, meaning that quiet periods don’t usually stay quiet for long.
Look After Your Investment with No Letting Go
If you’re thinking of investing in buy-to-let, it’s vital to have all of your documents and property checks in order.
Here at No Letting Go, we help landlords, letting agents and property professionals alike manage their portfolio by providing reliable inventory reports and other essential services.
From check-in services to property appraisals, discover our wide range of professional property inventory services to see how we could help protect your investment.
With several types of tenancies out there, the variations can get confusing for new tenants and landlords. So, what is a periodic tenancy?
Periodic tenancies can offer great benefits, including increased flexibility and less paperwork. However, they aren’t without their drawbacks.
That’s why we’ve created this guide on the risks and rewards of periodic tenancies, to help you make an informed decision before drawing up a contract.
What is a Periodic Tenancy Agreement?
A periodic tenancy is a tenancy that runs for a certain period of time, most commonly month to month. Periodic tenancies can also run on a week to week or quarterly basis, although this is less common.
Unlike fixed term tenancies, periodic tenancies work as a rolling contract which can be terminated by landlord or tenant by giving notice.
Types of Tenancy Agreements
Tenancies can come in all shapes and sizes, depending on the terms and conditions of the agreement. However, here are the most common types of tenancies you’re likely to come across;
Assured Shorthold Tenancy
Assured shorthold tenancies are the most common and apply to most private rentals with a tenancy date starting after 15 January 1989. Most assured shorthold tenancies begin with a fixed period of 6 or 12 months.
Non-Assured Shorthold Tenancy
If your rental property demands less than £250 or more than £100,000 in rent per year or it is used as a holiday home, it won’t be eligible for an assured tenancy. This means you don’t have to enter the tenant’s deposit into a protection scheme or serve a section 21 notice to evict tenants.
Assured Tenancy
It is unlikely you’ll need an assured tenancy these days unless you are a housing association. This type of tenancy gives the tenant longer-term stability.
Excluded Tenancy
Sometimes referred to as a license, excluded tenancies are for tenants who lodge with their landlord and share communal areas.
Regulated Tenancy
If a tenancy started before 15 January 1989 it may be a regulated tenancy. The difference being that tenants have enhanced rights when it comes to eviction and ‘fair rent’.
Company Let
When renting to companies, different rules apply in terms of deposit protection and eviction notices.
Fixed Term Tenancy
A fixed term tenancy lasts for an agreed set of time, depending on what is set out in the tenancy agreement. Usually this will be 12 months.
Short-Term Fixed Tenancy
A short-term fixed tenancy lasts for 90 days or less.
Periodic Tenancy
A periodic tenancy works on a rolling basis with no fixed end date. E.g. month by month.
What is a Statutory Periodic Tenancy?
A statutory periodic tenancy occurs when an assured shorthold tenancy comes to the end of its fixed term and the tenant stays at the property without renewing the contract. If the tenant continues to pay rent and it is accepted by the landlord, the tenancy will continue on a periodic, rolling basis.
This transition from fixed term assured shorthold tenancy to statutory periodic tenancy is automatic.
What is a Contractual Periodic Tenancy?
A contractual periodic tenancy differs in that it is agreed in the tenancy contract as opposed to automatically transitioning from a fixed term into a periodic tenancy. This can either be agreed upon at the start of the tenancy or shortly before the fixed term contract expires.
It is also possible to enter into a periodic tenancy from the outset by setting the initial term as one month or week.
How Does a Periodic Tenancy Work?
While a fixed term tenancy lasts for an agreed set of time, a periodic tenancy works on a rolling basis, from month to month or week to week. It doesn’t end until one party gives notice.
In a periodic tenancy, the period depends on when the rent is paid by the tenant. So, in a monthly period tenancy the tenant would pay rent each month.
Shorthold tenancies become periodic tenancies after the fixed term agreement expires and if there is no new contract drawn up with the remaining tenants. The assured shorthold tenancy will automatically become a periodic tenancy as long as the tenants do not change, and they are happy to retain the same contract. The same conditions will apply and there is no further action needed by the landlord or tenant.
Ending a Periodic Tenancy
To end a periodic tenancy, there are several legal processes that can take place;
- Both landlord and tenant mutually agree to end the tenancy
- The landlord decides to evict the tenant
- The tenant gives notice
- The landlord gives notice
Periodic Tenancy Notice: Tenants
To end a periodic tenancy, tenants will need to give the right amount of notice depending on the terms stated in the tenancy agreement. They also need to ensure it ends on the right day. For example, if a monthly periodic tenancy began on 1st January it will need to end on the last or the 1st day of the month. From this date, they will no longer be liable for rent payments.
Statutory Periodic Tenancy Notice
If it is a statutory periodic tenancy, tenants must give at least 1 months’ notice for a monthly contract or at least 4 weeks’ notice for a weekly contract. The notice must end on the first or last day of the tenancy period.
Periodic Tenancy Notice Period: Landlords
Landlords must give tenants a written ‘notice to quit’ which must end on the last day of the rental period, give the minimum notice period and include legal information.
For statutory periodic tenancies, it is also possible for landlords to issue a section 21 notice as long as the landlord gives the tenant at least two months’ notice and the last day is the last day of the tenancy period. If the tenant does not move out on this date, landlords have the right to request a court order to regain possession. However, changes to the law regarding section 21 notices now require a landlord to give their reasoning, alongside relevant evidence.
Benefits of a Periodic Tenancy for Landlords
A periodic tenancy can have wide-ranging benefits for both landlord and tenant, including;
- Increased flexibility. If you suddenly need to regain possession of your property, a periodic tenancy speeds up this process as you don’t have to wait until the end of a fixed period.
- Attracting tenants. For some tenants, this flexibility is a bonus. If your tenant moves a lot for work or often needs to relocate suddenly, a periodic tenancy becomes appealing.
- Reduced letting agency fees. Periodic tenancies can dispel the need for renewals and the administration costs that come with them.
- If for any reason you need to increase the rent, this is made a lot easier by periodic tenancies. Revisions to rent payments can be made much more quickly when operating on a month by month basis.
- If you are having issues with a particular tenant, a periodic tenancy may be in your favour as you are better able to evict problem tenants as a last resort.
Risks of Periodic Tenancies for Landlords
With these advantages also come risks. If you’re thinking of entering into a periodic tenancy, watch out for the following potential dangers;
- Naturally, periodic tenancies are more likely to attract tenants looking for shorter, more transient leases. If it’s stability you’re after, you may want to think twice.
- Similarly, shorter term tenants can cost more in terms of marketing and vetting potential new tenants to replace them.
- With 1 month or less notice periods, you don’t have a long turnaround time if a tenant decides to move out unexpectedly. You will need to have end of tenancy cleaning and maintenance processes finely tuned so as not to lose out.
- If your tenant moves out during a ‘notice to quit’ period, you may be liable for paying council tax for the property. To avoid this situation, make sure you have a contractual periodic tenancy agreement in place to ensure this remains the tenant’s responsibility.
Periodic Tenancies: Good Idea?
Periodic tenancies can be a good idea as they offer increased flexibility for both landlord and tenant and can reduce the number of administrative tasks needed throughout a tenancy.
However, to protect your investment, we recommend;
- Always drawing up a contractual periodic tenancy agreement. This way you have all the agreed terms in writing and won’t be liable for council tax payments if your tenant moves out unexpectedly.
- Getting your property marketing up to scratch to attract new tenants and avoid extended void periods.
- Making sure you have all the processes in place for a speedy turnaround to avoid any losses. This includes;
- Cleaning and maintenance
- Inventory management and reports
- Right to rent checks
- Smoke and CO checks and installation
- Check-in and check-out
- A detailed and fuss-free inventory report is vital when you’re dealing with potentially shorter tenancies. Having a streamlined process in place will help protect you against loss or damage and help recover any costs without going through lengthy disputes.
Be Prepared with No Letting Go
The easiest way to protect your investment and maintain a happy landlord/tenant relationship is to entrust a comprehensive, unbiased inventory reporting service.
Here at No Letting Go, we provide a tailor-made service, including everything from check-in to property visits.
Find out more about our property services to see how we could build them into a package that suits you.
Subletting is surprisingly common and can offer benefits for both landlords and tenants. But what counts as subletting? And what do landlords need to know about the risks?
We explore what subletting is and what you can do as a landlord to mitigate the risks.
What is Considered Subletting?
Subletting is when a tenant decides to rent out either a room or whole property to a third party. For example, if a tenant decides to go travelling for an extended period, they might try to let their room out to another tenant to pay their rent. Other reasons could include;
- Change in income
- If they need to relocate before the end of a contract
- If another tenant decides to move out before the end of the tenancy and they need to fill the space
To be a sublet, the original, existing tenant needs to give exclusive access of at least one area of the property to the subtenant. The subtenant will not pay rent directly to the landlord but to the original tenant.
Is Subletting Illegal?
In most cases, subletting is legal if the tenant obtains the landlords permission to let out the rental property.
However, if the tenant sublets without written permission, they could come into legal difficulties.
Can A Landlord Refuse A Sublet?
This all depends on what it says in the tenancy agreement. If there is a section in the agreement that says a tenant can ask the landlord to sublet, landlords will need to have a valid reason for refusal.
However, if there is no mention of subletting in the tenancy agreement, as a landlord, you can refuse more easily.
It’s worth noting that in the case of fixed term tenancies, the tenant may still be able to sublet without consent if there is no mention in the agreement. That’s why it’s important to be clear on the terms of your agreement from the get-go.
Not keen on the idea of allowing a tenant to sublet? There are a few steps you can take to ensure it doesn’t happen;
- Include a section in the tenancy agreement prohibiting subletting
- Arrange regular property inspections to help prevent unwanted subletting. The professional carrying out the inspection will usually be able to tell if something is awry. It will also indicate to your tenants that you aren’t complacent as a landlord.
- Try to develop strong relationships with your tenants so they come to you first if they are having any difficulties making the rent.
Illegal Subletting
If a tenant decides to go ahead and sublet without permission, there are two main circumstances that most commonly occur;
The tenant rents out a room in the property whilst still living at the address.
This is the most common situation, and often happens when flatmates move out unexpectedly.
In this situation, think carefully about how you want to proceed. If the new subtenant has caused no issues and the rent is paid on time, it can sometimes be advantageous to allow them to continue living at the property. If this is the case, draw up an agreement to stay protected. Don’t accept any payment until you have a proper tenancy agreement in place.
The tenant rents out several or all the rooms in the rental property whilst living at a different address.
This could have serious consequences for you as the landlord. If these subletting tenants report issues to the original tenant who they assume is the landlord, property maintenance issues may go unresolved and you start to lose control of your property.
What Happens If Your Tenant Sublets Without Permission?
If you discover your tenant is subletting without your permission, there are a few steps you can take;
- Talk to your original tenant first to find a solution
- If the tenant persists subletting, sub-tenants should be informed, and either be asked to vacate the property or draw up a new tenancy agreement for them
- If all else fails and the subtenant refuses to vacate, you may need to begin the eviction process
What Are The Risks Of Subletting?
If a tenant decides to sublet their room, there are a number of risks you need to be aware of;
Insurance and Mortgage
Some insurance and mortgage providers don’t allow subletting and ignoring this could lead to voiding your contract. It’s vital you avoid this at all costs by checking your agreement before allowing a sublet.
End of The Tenancy
If your original tenant decides to move out, but their subtenant is still living in your rental property, you may come up against issues. Evicting a tenant without a tenancy agreement can get complicated.
How Do You Sublet Safely? Tips for Landlords
Subletting doesn’t always spell disaster. In fact, it can be profitable for both landlord and tenant, solving common issues such as change of circumstance.
If you do decide to grant your tenant permission to sublet, here’s a few steps you can take to ensure your investment stays protected;
- Ensure you are clear on the contents of the tenancy agreement and what it says about subletting. If there is no mention, you may want to add a clause to be on the safe side.
- Spend time on tenant referencing to ensure you end up with reliable, trustworthy tenants.
- Spend time getting to know your tenants and making a good impression. This way, they are more likely to come to you first if their circumstances change.
- Carry out regular property inspections.
Protect Your Investment with No Letting Go
If you need a helping hand protecting your investment, we have teams of experienced inventory clerks across the country ready to support you.
We can provide regular property visits, every 3-4 months to ensure your property is being well maintained and tenants are fulfilling their contractual obligations.
In addition, a comprehensive inventory report is one of the best ways to protect your investment in the long term.
Interested in hearing more? Get in touch or visit our services page to find our property inventory packages.
From where to advertise, to creating an engaging listing, getting your marketing right is essential for making your property stand out from the crowd.
Effective advertising generates greater interest in your property, attracting the right target tenants and providing you with a wider tenant pool to choose from.
Here, we share our advice on how to advertise rental property so you can speed up the rental process, find the right tenants and secure maximum returns on your investment.
Where To Advertise My Rental Property?
Let’s start with where to advertise. With the internet becoming the preferred source for property searches, it makes sense for your property to have a strong online presence.
Here are your options;
Online Property Portals
Online property portals such as Rightmove and Zoopla are very popular as they allow prospective tenants to narrow their search by location, size, price and much more.
Even high street lettings agents are turning to these sites to help get the properties on their books seen by a wider range of tenants.
Here’s a list of some popular property portals;
- RightMove
- Zoopla
- Prime Location
- On the Market
Most of these property portal sites don’t deal with private landlords directly. Instead you have two options;
- Enlist the services of a high street lettings agent to post the listing for you
- Use an online estate agent such as OpenRent or Upad
High Street Letting Agent
The benefit of advertising your property through a quality high street letting agent is that they will have the expertise and experience to market your property professionally and will take away the hassle of finding a tenant.
A letting agent will also conduct tenant referencing, property viewings and tenant checks which will save you a lot of time. However, this is often the more expensive option.
Online Letting Agent
When enlisting the services of an online letting agent, they will list your property for you on the relevant property websites and generate enquiries. You will still be able to meet potential tenants, conduct tenant referencing and choose the best fit yourself.
This is often cheaper than using a high street estate agent as there is just one fixed cost.
Social Media Platforms
Social media platforms such as Facebook are becoming a popular way of advertising and searching for rental properties, especially when it comes to finding rooms in shared houses.
The benefit of listing your property on social sites is that it is likely to reach wide audiences, as people can share with friends and comment directly on photos.
Lots of letting agents use social media to advertise the properties in their portfolio, or if you operate as a private landlord, you can create your own account. Join local online community groups to get your property seen by people looking for housing in the area and always reply to comments and enquiries.
How Do I Market My Rental Property Effectively?
Now we’ve looked at where to advertise, we now need to find out how. We’ve compiled a list of essential tips and advice to help rent your property to the right tenants, and fast;
Establish Your Target Tenant
The first step in the process is to establish your target tenant. Identifying a tenant profile will help tailor your marketing efforts to appeal to the right people.
For example, if you’re renting to students, make sure you advertise your property as furnished, or if you are targeting families, focus on space and the prevalence of schools in the area.
Calculate Your Rental Price
Next, you need to calculate a price bracket according to similar properties in the area and your target tenant’s income. Make sure you factor in maintenance costs, and any other outgoings.
Tip: When advertising on online property portals, take note of the price brackets of each site, and which price bracket your property will appear in. If you increase or decrease the rental price you could appear in a whole different price bracket and not be searchable to your target tenant.
Identify Your USPs
Your property’s USP or unique selling point is what makes it stand out from the competition, and what makes it attractive to your target tenant. It could be anything from a private garden or parking space to its proximity to local amenities such as schools and shops.
Whatever it is, make sure you highlight it in the description fields.
Include a Detailed Description
When it comes to writing a description for your property, you need to strike the right balance between engaging and informative.
Provide as much detail as you can about the property, including key features, the local area and USPs.
It’s best to start with a short, engaging paragraph describing the property as a whole, focusing on lifestyle aspects and the properties best bits. Then follow this up with a more detailed account of features, rooms and outside areas.
Always include the availability date and any other important details such as if bills are included.
Tip: If the property is furnished with quality furnishings and appliances, it may be worth incorporating some well-known brand names into the description. E.g, The modern kitchen features an LG fridge and Samsung washing machine.
Use Quality Photographs
Professional, good quality photographs are perhaps the most important factor when it comes to advertising your property. Be sure to include photos of each room, the exterior and any outdoor areas, paying particular attention to special features.
Try to take the photos on a sunny day to show your property in the best light and ensure everything is clean and tidy.
To maximise your properties potential, it’s worth investing in 360° property photography. 360° degree photography provides interactive, panoramic images that place the viewer in the footsteps of the photographer, bringing your property to life. These images can even be transformed into a virtual tour for remote property viewings!
The main thing to bear in mind is that first impressions count, and the images you provide will be make or break for many tenants.
Provide Details About Your Desired Tenant
As well as providing details for your tenants, it’s also a good idea to indicate what type of tenant you are looking for from the get-go. For example, state whether you allow pets or whether you are willing to rent to students. This will speed up the rental process by ensuring everyone is on the same page.
Respond Quickly
One you get an enquiry from a potential tenant, act fast. A swift reply will give a good impression and help secure a tenant as quickly as possible.
Ask For Help
Busy landlords have a lot to think about. That’s why it can pay to enlist professional services when advertising your property for rent.
We offer a range of property management services, all designed to help landlords, lettings agents and property professionals save time, streamline their processes and comply with regulations.
From 360° photography to help get your property noticed, to property viewings and comprehensive inventory reports, our teams across the UK are ready to help. Get in touch or browse our full list of property inventory services to find out more.
Usually, landlords don’t have to worry about council tax. However, when it comes to HMO properties and vacant periods, things can start to get confusing.
It’s important to understand your landlord council tax responsibilities so as not to get caught out by any unexpected bills or legal issues. So, who pays council tax? What happens when your property is empty? And what about unpaid tenant debts?
From who is responsible to available discounts and exemptions, our council tax guide covers everything responsible landlords need to know.
Should I Be Paying Council Tax?
All residential properties in England and Wales are liable for council tax. If you fail to pay on time, there could be serious financial and legal consequences.
How does it work? The council tax system works according to a hierarchy of liability. The first on the list to pay is any adult over the age of 18 who is an occupant of the property. The landlord or property owner comes much further down this list.
How Is Council Tax Calculated?
Properties are assessed by the Valuation Office Agency (VOA) and placed within bands A-H according to the location and type of housing. The banding is based on the amount the property could be sold for and the cost for each band varies by council.
Who Pays Council Tax: Tenant Or Landlord?
This depends on the sort of tenancy agreement you have in place. Usually, if you rent the entire property to one or several joint tenants, it is their responsibility to pay. (This includes single occupants, families and shared tenancies) In this case, the bills will be sent directly from the local council to your tenants, leaving you out of the equation.
However, if you rent to several tenants with individual tenancy agreements, you will become responsible for paying council tax. Therefore, if you rent out an HMO property, you will be liable to pay.
Do Landlords Pay Council Tax On Empty Properties?
Yes. During void periods, the landlord is responsible for paying council tax.
The size of the bill depends on your local council. You could be given a discount of up to 50% while the property remains unoccupied. However, this is becoming more unlikely as the number of unoccupied properties grow.
If your property is unfurnished, you may be exempt from council tax for up to 6 months.
Is A Landlord Liable For Unpaid Council Tax?
Not usually. As long as the tenancy agreement stipulated that council tax payments were the responsibility of the tenants, then landlords should be safe if tenants leave with unpaid debts.
If your property is vacant for any time, as the landlord, you will be responsible for paying tax during this period. However, you should not be responsible for repaying leftover bills that should have been paid by tenants while they were living in the property.
Without proof of a signed tenancy agreement, it will be harder to convince the council of your exemption if your tenant moves out early without notifying you.
See our blog on who is responsible for unpaid utility bills for more answers to common questions regarding bills.
Landlord Council Tax Exemption
Some properties and tenants are either exempt from paying council tax or are eligible for a discounted rate.
If you’re a landlord of an HMO property, make sure you check your tenant’s status to find out if you are eligible for any discounts. For example, if there is a mix of full-time students and one adult, you may receive a 25% discount.
Who Is Exempt From Council Tax?
There are certain groups of people who are exempt or eligible for a discounted council tax bill;
- Single occupants of a property receive a 25% discount
- Full time students are exempt
- Live in carers are exempt
- Tenants below the age of 18 are exempt
What Properties Are Exempt From Council Tax?
There are also a number of properties that are exempt from paying council tax;
- Unfurnished properties may be exempt for six months
- Recently repaired properties may be exempt for six months
- Properties occupied by full time students only
- Properties solely inhabited by tenants under the age of 18 receive a 50% discount
Landlord Council Tax Advice
To ensure you stay on top of your council tax responsibilities and avoid any unexpected bills, follow these simple tips;
- Always determine who is responsible for paying council tax in the tenancy agreement
- Keep a signed copy of this agreement on file
- Notify your local authority at each change of tenancy and give the names of new tenants
- For HMO properties where you are liable to pay council tax, ensure you factor this cost into the rent price
- Plan for any void periods in which you may have to pay council tax
- Check for any council tax discounts or exemptions you may be eligible for
- Try to minimise void periods to avoid paying council tax in between tenants
Property Inventory Management From No Letting Go
If you’re a busy landlord looking for help managing your portfolio, we could help. Our wide range of professional property services includes comprehensive inventory reports, vacant property inspections and right to rent checks.
Here’s what else we offer;
- Floor plans
- Smoke and CO reports
- 360-degree property photography
- Property appraisals
- HHSRS
- Legionella risk assessments
- Digi Sign
- Check in/check out
- Mid-term reports
For all your property management needs, browse our full list of property services to find out how our friendly team could help streamline your business and protect your investment.
What if your tenant moves out without paying their utility bills or council tax? Does it fall on you as the landlord to pick up the pieces?
This is a common question among both landlords and tenants, and it needs clearing up. So, who is responsible for unpaid utility bills? Let’s find out.
Are Landlords Responsible For Unpaid Utility Bills?
Not usually. As long as it is the tenant’s name on the bill, and it is stated in the tenancy agreement that tenants are responsible for utilities, landlords are not liable for unpaid bills left over by tenants.
However, as a landlord, there are some steps you will need to take to protect yourself if you find yourself in this tricky situation;
- Always tell the local council when a new tenant moves in. You will need to provide the names of the new tenants and the contact details of the previous tenants so they can get in touch if needs be.
- Inform the energy suppliers of the property of any change in tenancy (this includes gas, electricity and water)
- Encourage new tenants to change the name on the utility bills as soon as possible.
- Make a note of the meter readings at the start and end of each tenancy so you have a record for the utility companies.
- Ensure your tenancy agreement clearly states that utility payments are the responsibility of the tenant.
- Keep a signed copy of the tenancy agreement in a safe, easily accessible place.
What Bills Are Tenants Responsible For?
This depends on the tenancy agreement you have in place.
Commonly, tenants are responsible for the following bills;
- Water
- Electricity
- Gas
- Council tax
- Internet
However, this is not always the case. Let’s look at two different situations;
Utilities Registered In The Tenant’s Name
When bills are registered in the tenant’s name, the tenant is responsible for paying them from the date they move into the property. However, they are not responsible for any debts left behind from previous tenants. It’s important for tenants to check the meter readings on move-in day so they can supply their energy providers with the correct readings at the start of their tenancy.
In this case, landlords are not required to pay any remaining payments after their tenant has left. The utility companies will have to chase the tenant themselves, meaning the issue is out of your hands.
Utilities Registered In The Landlord’s Name
You can choose to register bills in the landlord’s name and ask the tenant to pay you for their usage. This can be helpful for short lets, or if you rent out a room in your own house. However, if the tenant leaves without paying, you may be responsible for paying the outstanding sum.
To avoid this situation, always follow the steps outlines above.
End Of Tenancy Utility Bills
To end a contract, most utility suppliers require a few days notice before the end of a tenancy. As long as the bills are in the tenant’s name, this is entirely their responsibility to organise.
If there is outstanding debt left over and…
- The utilities are in the landlord’s name
- Or the tenant failed to register for utilities whilst living at the property
You may be able to prove the tenants were living at the property if you supply a copy of the tenancy agreement. However, this will depend on the individual policies of the utility companies.
Who Is Responsible For Bills During Void Periods?
If your property is empty for any period of time, the owner of the property is responsible for utility payments.
This is why it’s best to keep energy usage to a minimum in between tenants. However, during the winter, we recommend keeping the heat consistent to protect against mould and damp and avoid further maintenance costs in the long run.
If your property is left vacant for an extended period, you will need to organise regular vacant property inspections to check for leaks or mould.
Who Is Responsible For Utilities In Multiple Occupancy Properties?
If there are several tenants living at a property, disputes can often arise regarding bills. The main thing to remember is that whoever’s name is on the bill is ultimately responsible.
This means, if all tenants in a house share or HMO rental property have their name registered to a utility bill, they are all equally liable to repay debts, even if it’s only one tenant who hasn’t paid.
Property Management Help From No Letting Go
One of the simplest ways to avoid disputes and protect your investment at the end of a tenancy is to have all of your property reports in one easily accessible place.
All of our check in reports come with utility checks and meter readings included to help landlords and property professionals keep on top of their responsibilities.
Keen to learn more about how our flexible reporting could help? Find our full list of property inventory services here.
As a landlord, you’ll understand the importance of finding reliable tenants that pay the rent on time. One way to secure this is through comprehensive tenant reference checks. But what happens if a potential tenant fails their credit check?
Renting to tenants with bad credit doesn’t necessarily spell disaster. If the tenant ticks all the right boxes, there are ways to get around this issue and protect yourself and your investment.
What Is A Tenant Reference Check?
A tenant reference check helps landlords and letting agents decide if a tenant is likely to be reliable and pay each month’s rent on time.
In addition to a credit check, tenant referencing can look for;
- Proof of identity
- Proof of employment
- Current salary
- Bank statements
- Proof of benefit claims
- Right to rent in the UK
- A previous landlord reference
What Is A Credit Check?
A credit check looks at the tenant’s credit report and financial history, spotting any times they have missed bill payments or have fallen into arrears. This is analysed to produce an individual credit score.
A credit score can range from around 0- 900 points, depending on the score system used. A good credit score could be anything above 750 points.
What’s The Minimum Credit Score A Landlord Should Accept For A Tenant?
An acceptable credit score will be dependent on the scoring system used, as they differ between referencing agencies. However, when a tenant’s credit score comes back as poor or very poor, you may want to think about asking some further questions.
What Causes A Bad Credit Scoring?
A poor credit score can be caused by a number of issues, some more concerning than others when it comes to potential tenants.
Here are a few of the more serious reasons for a poor credit rating;
Unpaid Debts
Naturally, being in debt can negatively affect a tenant’s credit score as it suggests that they struggle to manage their money and are not financially stable. If this issue is uncovered by a credit check, you may think twice about entering into a tenancy agreement.
Being Declared Bankrupt
This should set major alarm bells ringing for landlords as it suggests the tenant has had difficulty managing repayments in the past.
County Court Judgements
A County Court Judgment (CCJ) is when a tenant is forced to repay a debt by the courts. If this shows up, it’s not a great first impression.
Late Credit Card Or Loan Repayments
If a tenant has struggled to pay credit card repayments in time, this doesn’t bode well for rent payments.
There are also a number of issues that can affect credit scores that don’t necessarily mean a tenant will struggle with their finances;
Not Having A Credit History
One reason for a poor credit rating that is particularly common among younger tenants and students is not having a credit history at all. If the tenant has never taken out a credit card or loan and has never paid bills from their bank account, they won’t have a credit trail to check, resulting in a low score.
This is a likely occurrence if you rent to students or young adults who have just left home and doesn’t necessarily mean that the tenant will be bad at managing their money.
Only Making The Minimum Credit Card Repayments
Credit scores can be affected if the tenant only makes the minimum repayment on their credit card each month. The assumption is that they are struggling to keep up with all their outgoings, however this isn’t always the case.
Not Being On the Electoral Roll
Not updating addresses and personal information can affect credit score, as can not being on the electoral roll. This step is easily forgotten when moving house and doesn’t prove the tenant will be unreliable.
No Proof Of Address
If a tenant hasn’t been responsible for paying bills at their previous residence or were not named on the tenancy agreement, it can be difficult for the referencing agency to determine proof of address.
How Important Is Good Credit?
As we explored above, good credit isn’t the be all and end all when it comes to finding a good tenant. Equally as important is whether they fit your target tenant profile.
If you’ve been struggling to rent out your property or think the tenant will make a good fit, there are ways to get around bad credit.
How To Rent to Tenants With Bad Credit
Poor credit rating alone doesn’t mean you should give up on a tenant if they tick all the other boxes. Here are some ways to minimise risk;
Dig Deeper
The first thing to do when a potential tenant’s credit check comes back as poor, is to find out why. If it was down to late or missed payments it may be best to steer clear, however if it’s something as simple as a lack of credit history then it needn’t stop you from going ahead with the tenancy.
Ask To See Previous Rent Payments
Seeing proof of regular, timely rent payments for a previous rental arrangement will help to ease your concerns about their responsibility as a tenant.
Charge a Larger Deposit
If a tenant has a low credit score, it’s likely they will be prepared to pay a slightly larger security deposit to make up for it. This will give you extra leverage when it comes to recovering costs at the end of the tenancy.
Ask For A Guarantor
One of the best ways to protect yourself if a tenant has poor credit is to ask for a guarantor. A guarantor will be able to cover any costs if the tenant is unable to pay, giving you extra protection.
The guarantor will need to sign the tenancy agreement along with the tenant and have secure financial status.
Ask For A Previous Landlord Reference
One sure way to find out if a tenant is reliable is to ask their previous landlord.
Here are some questions to ask;
- Did the tenant pay rent on time each month?
- Did the tenant look after the rental property?
- How often did the tenant raise issues with the landlord or letting agent?
- Were any complaints received from neighbours regarding the tenant?
- What condition did they leave the property at the end of the tenancy?
- Would you feel happy renting to the tenant again?
Ask For Rent Upfront
While this may be a lot to ask and not always in scope, a tenant with a high risk credit score may be prepared to pay rent upfront. Paying the first six months of rent upfront will ease any initial worries and give the tenant time to prove their reliability.
Receive Payments By Direct Debit
Asking for rent payments via direct debit is common practice these days and is especially important if you’re concerned about a tenant’s financial responsibility.
Shorten The Tenancy
If you’re worried about the reliability of a tenant, setting a shorter, probationary rental period in which the tenant has time to prove their responsibility could be a good idea. If you experience late payments or other issues, you can terminate the tenancy early.
Talk To The Tenant
You can tell a lot from a frank, face-to-face conversation. If your potential tenant willingly discloses their credit issues and can provide a reasonable explanation for the low score, you will be much better placed to make an informed decision.
How To Organise A Tenant Reference Check
Although credit checks aren’t the only way to choose the right tenant, it is important to perform tenant referencing so you aren’t caught out further down the line.
As a busy landlord, you may want to delegate this task to a professional tenant referencing company. Placing this responsibility in the experienced hands of a recommended referencing company will minimise any risks and help the process go smoothly.
Protect Your Property With No Letting Go
In addition to choosing a reliable tenant, a comprehensive inventory is one of the best ways to protect your rental property.
At No Letting Go, we offer unbiased property inventory reports to help safeguard your property against damage and recover essential costs at the end of a tenancy. All the way through from Schedule of Condition, to check in and property visits, our property clerks are there to simplify the rental process and save you time.
Interested in hearing more? Head to our website to discover the full range of property management services we offer.
Budgets can be tough to manage for landlord and letting agents alike. Sometimes, property maintenance costs can eat into your finances dramatically.
From what’s involved to how to save, we offer insights and guidance on how to best manage budgets when undergoing maintenance on your property portfolio.
What Is Included In Maintenance Costs?
Before we go into budget management, we need to be clear on what maintenance costs are involved in renting a residential property.
Here’s a list of all the things to consider when it comes to maintenance;
Repair Costs
As a landlord, it’s your responsibility to fix any repairs needed resulting from normal wear and tear. This can include;
- Repairing or replacing white goods and appliances
- Fixing boiler issues
- Repairing any electrical faults
Refurbishment & Decoration
Keeping your property looking fresh for new tenants is an important part of being a good landlord and attracting the right target tenants. It’s recommended that carpets are replaced every 5-7 years, and properties are fully redecorated every 3 years.
However, if your property is looking particularly lived in after a tenancy or you come across some questionable stains, you might need to redecorate more often.
Here’s what else is included in refurbishment and decoration;
- Painting throughout
- Replacing carpets or flooring
- Replacing curtains
- Replacing old, tired furniture items every 10-15 years
- Replacing kitchen and bathroom fittings every 10-15 years
Exterior Maintenance
It’s not just the inside that needs attention. Staying on top of the exterior of your property can help ward off future structural issues and save money in the long run.
Here’s what it could include;
- Replacing missing roof tiles
- Clearing guttering
- Garden fence maintenance
- Window cleaning and repair
Interior Cleaning
Thorough cleaning is essential between tenancies, and you may also need to arrange for cleaning to be done during a tenancy. If the windows need cleaning for example, or if the property has suffered water damage.
Property Inspections
Particularly important during void periods, regular property inspections are an important part of maintenance for buy to let properties.
Inspections protect your property from theft, vandalism or damage from unnoticed leaks, preventing the need for extensive future repairs. We offer a professional vacant property inspection service to give you peace of mind that your investment is protected.
Gas Safety Certificates & Safety Checks
UK landlords have a legal requirement to arrange regular safety checks, including;
- An annual gas safety inspection from a Gas Safe registered engineer
- Electrical safety checks
- PAT tests for white goods
- Energy Performance Certificate
- Ensure smoke detectors are present and working
Your Time
This cost is usually overlooked by most landlords, but the time you put into the maintenance of your portfolio really adds up. Particularly if you are balancing your duties as a landlord with another paid job, extra time spent on maintenance may mean losing out on wages.
If this is the case, it may be worth investing in a full management service from a property management company so you can swap a management fee for more time for other ventures.
How Much Does It Cost To Maintain A Rental Property?
Maintenance costs will vary depending on several factors;
- Size of the property
- Age of the property- older homes require more upkeep
- Location of the property- service charges vary dependant on area
- Type and number of tenants
For example, if you rent to students or large families, you may have to fork out more for accidental damage repair costs.
Landlord Maintenance Costs: How to Save Money
Now we’ve discussed what’s involved, it’s time to look at ways to save.
Choose Your Target Tenant Wisely
While finding tenants may not be the first thing you think of when it comes to maintenance, the tenant you choose could have an effect on your maintenance costs.
For example, as mentioned above, renting to students can result in more accidental damage as there tends to be more people living in one property, and tenants have a reputation for partying! Similarly, renting to tenants with pets is likely to involve more refurbishment at the end of the tenancy.
Deciding on your target tenant from the get-go is an important part of the process.
Act Fast When It Comes to Repairs
The quicker you act on repairs and maintenance tasks, the more popular you’ll be with tenants and the less likely they are to develop into serious issues. Usually, dealing with problems as soon as they arise means you can save money in the long run as you have time to think about the best possible solution.
Paying for maintenance costs early will also help you to manage your monthly budgets and keep on top of your spend.
Buy Quality Furnishings
Opting for the cheapest furnishings available isn’t always wise. The cost of replacing flimsy furniture every year is likely to add up to more than investing in quality in the first place. This is particularly true for mattresses, sofas and dining tables. Our blog on furnishing your rental property will help you with some handy tips.
Keep It Simple
When it comes to decorating your properties, more is less. You don’t need to go overboard to provide a comfortable home for tenants. Simple, modern furniture without too many frills will appeal to most and will be kinder on the budget.
Tip: Avoid painting everything white as it will require more upkeep. Neutral, mid-tones are much more forgiving.
Don’t Skimp on Landlord Insurance
Landlord insurance is essential when renting a property. Finding the right deal can help you save when things go wrong. Quality contents or accidental damage insurance will protect you in the case of weather damage or accidental spills.
Make sure you shop around for the best deals.
Check Council Tax Exceptions
If one of your rental properties is vacant for a period, or you are performing refurbishment that renders your property inhabitable, you may be eligible for Council Tax redemption. This will leave you with some extra cash to spend on essential repairs and decoration.
Landlord’s Energy Saving Allowance
By increasing the energy-saving potential of your property, you could save money that can be injected back into the maintenance budget.
By reinforcing insulation in your rental property, you could save a significant amount in tax.
Know When To Ask For Help
While rolling up your sleeves and getting stuck in can save on service fees, it’s not always the best option.
Botched DIY can end up costing more than the original problem, and when it comes to electrical or plumbing issues, professional is always best.
Get More Than One Quote
When you need to pick up the phone to a plumber or tradesperson, make sure you do your research.
Particularly important when it comes to bigger jobs, getting several quotes will help you find the most competitive price.
Invest In A Comprehensive Inventory Service
Compiling a comprehensive written and photographic list of all of the items and furnishings and their condition within your property is one of the best ways to recuperate maintenance costs at the end of a tenancy.
If there is any damage beyond normal wear and tear, it will be much easier to deduct the appropriate costs from the deposit.
A professional property inventory service provides an impartial account of your property and is delivered using high quality photography in a handy, easily accessible digital report.
Landlord Maintenance Responsibilities: Help From No Letting Go
The costs of being a landlord are wide ranging. From agent fees to mortgage interest, balancing your rental income with outgoing costs can be tough.
That’s why sometimes it pays to get some help. Whether it’s repairs and maintenance reports or inventory services, our teams of experienced clerks could help streamline your business so you can take control of your budget.
Browse our full list of property management services to find out how we can help.
It can be tricky to make your property stand out from the crowd in the saturated property sector. So, how can you take advantage of the latest in digital photography software to ensure your property is snapped up by the best tenants?
That’s where 360° property photography comes in. Our virtual photography service could be the difference between blending in and beating the competition.
If you’re looking to attract more viewings and get ahead of the curve with the latest in PropTech, find out what this service could offer.
What is 360° Degree Photography?
360° degree photography provides interactive, panoramic images that place the viewer in the footsteps of the photographer. This type of panoramic photography allows you to ‘look’ up, down and to the left and right of the image for a full 360° view.
Panoramic photos are transformed via 360 degree photography software to recreate a room or space. (You may have seen this being used in google street view on google maps)
What is a 360° Virtual Tour?
A 360° virtual tour replicates a standard property tour or house viewing through virtual reality, allowing the user to ‘visit’ properties from anywhere in the world. Users are able to explore each room of the property from the comfort of their living rooms via a connected device.
The Benefits of Virtual 360° Photography Tours
With most property searches starting online, it makes sense to present your property in its best light. From saving time to gaining trust, here’s what 360° technology could do for your business;
Exceptional Property Marketing
First impressions count and 360° photos could give your property the edge. High quality images make you and your business look professional, and the more detailed images available of your property, the more popular it will be with prospective tenants.
Bring your property to life and highlight its best features with a full, virtual tour and help potential tenants picture themselves living in your property by exploring each room in detail.
Gain Tenant Trust
There isn’t really anywhere to hide when it comes to virtual photography tours. By providing a realistic picture of your property and putting every part of the building on display, you will gain trust from tenants. Essential for starting the tenant relationship off on the right foot.
Remote Property Viewings
A virtual tour can be accessed from anywhere- all you need is a digital device.
Save time and resources by allowing prospective tenants to experience an immersive online property viewing from home. This benefits tenants and property professionals alike, as tenants won’t waste time visiting unsuitable properties and lettings agents will have a narrower, targeted tenant pool to focus on.
This service could also benefit landlords who live abroad or a long distance away from the properties in their portfolio, allowing them to inspect their investment from anywhere in the world.
Quick Turnaround
With a 24 hour turn around, our 360° virtual photography service can be delivered quickly, so you can stay ahead in the dynamic lettings industry.
Our Property Reporting Software
Our property reporting software, Kaptur, enables virtual tours to be embedded into any compliance report.
Kaptur has been developed specifically for busy property professionals looking to streamline their workload. From custom reporting to location mapping- Kaptur represents the latest in PropTech.
How Can 360° Virtual Tour Photography Be Used?
We’ve partnered with Eye Spy 360 to offer a nationwide service helping landlords, estate agents and property professionals market and manage their property portfolios.
Here’s an example of when virtual tours could be utilised;
- Residential sales and lettings marketing
- Insurance inspections
- Block and property management inspections
- Derelict building inspections
- Property research projects
- Inventory and schedule of condition of large properties
- Commercial sales and leasing
- Build to Rent projects
Whatever the type of property, a 360° virtual tour could be of service.
Property Photography and Floor Plans
In addition to standard property photography as part of your visual inventory report, we also offer floor plan services to add to your marketing literature and reporting.
All of the No Letting Go surveyors are highly trained according to the Royal Institute of Chartered Surveyors (RICS) guidelines, ensuring a professional service with accurate results.
360° Property Photography Prices
Interested in finding out more? Get in touch to book a survey or find out how we can incorporate a 360° virtual property tour into a regular No Letting Go report.
To discover how else we could help, browse our full list of property management services.
It’s a common question among new or soon-to-be landlords – do I need landlord insurance?
The short answer is yes. In addition to healthy investment returns, being a landlord comes with a lot of added risks and responsibility. To minimise this risk, investing in reliable insurance is essential.
Protecting your investment is paramount, but the jargon around landlord insurance can make it tricky to keep your facts straight.
We’ve curated a simple, yet comprehensive guide for landlords to help you get your head around landlord insurance and work out which type is best for you.
Here’s what it is, how it works and how to get it.
What is Landlord Insurance Cover?
Landlord insurance is a type of home insurance, specifically designed for rental properties. This broad term can include anything from contents insurance to rental protection.
Your policy could cover;
- Damage to the property
- Loss of rent
- Damage to or loss of contents
- Legal claims made against you by tenants
Is Landlord Insurance a Legal Requirement?
While landlord insurance isn’t a legal requirement, standard home insurance will not cover you for rental properties and going without could cost you dearly in terms of money, time and hassle.
Do You Really Need Landlord Insurance?
Often, you will need permission from your mortgage provider in order to let your property to tenants who will most likely require specialist insurance.
Legal issues aside, it’s always a good idea to protect your property as comprehensively as possible to protect both yourself and your investment.
What’s the Difference Between Home Insurance and Landlord Insurance?
Home insurance is designed to protect private homes from damage and loss. A rental property comes with a whole host of different issues. For example, as a landlord, you are less able to keep an eye on the day to day happenings in the property and have to rely on tenants to update you on any problems that occur.
Here’s a few of the differences between home and landlord insurance;
- Home insurance only covers the owner/occupier if they are in need of alternative accommodation. Landlord insurance covers tenants in this situation.
- Landlord insurance can cover you for loss of rent.
- Landlord insurance can cover any legal costs needed as a result of your actions as a landlord.
Types of Landlord Insurance
Here, we provide a brief overview of the different types of landlord insurance available;
Landlord Buildings Insurance
Buildings insurance covers any damage caused to the building itself. This could mean damage from fire, flooding or even malicious damage caused by the occupants. Every insurance provider is different, so you’ll have to check which type of damage this covers.
We highly recommend getting buildings insurance, especially if you are the freeholder.
Landlord Contents Insurance
Contents insurance protects against loss or damage of goods and furniture within a property. So, if you are renting a furnished property, it could be a good idea. However, this type of insurance does not protect against normal wear and tear.
Different insurance plans offer various cover and allow you to insure different parts of your property. For example, communal areas in flats or shared accommodation. It won’t protect items belonging to tenants.
Accidental Damage Insurance
Accidental damage insurance comes under contents insurance and can cover the cost of anything from spills and stains to broken windows.
Landlord Rent Guarantee Insurance
Otherwise known as rental protection insurance or loss of rent insurance, this type of cover protects you if you are unable to rent out your property as a result of an insured event like a fire or flood.
Tenant Default Insurance
Tenant default insurance covers you if your tenant fails to pay rent for two months, covering the cost for up to eight months. You will need to conduct the proper credit checks at the start of the tenancy to be eligible.
Commercial Landlord Insurance
If you let to a third-party business, you will need commercial landlord insurance. Commercial buildings have different designs and purposes, meaning there are different risks attached.
Commercial landlord insurance can cover accidental damage, vandalism and rental income protection.
Landlord Liability Insurance
Also referred to as property owner’s liability cover, this type of insurance covers legal defence costs and expenses in the event your tenant has an accident and considers it your fault.
With this type of insurance, you’re looking at high limits, usually upwards of £1 million.
Legal Expenses Insurance
This covers legal expenses such as court costs when chasing up late tenant payments and gives you access to legal expertise.
Employers’ Liability Insurance
If you employ anyone else to work at one of your rental properties, say as a gardener or cleaner, you are required by law to have this insurance. Employers’ liability covers legal defence costs and awards made for any injuries, accidents or illness as a result of your negligence.
HMO Landlord Insurance
If you rent out an HMO property, the terms of your insurance cover will differ slightly from single occupancy homes.
Finding an insurance plan tailored to HMO properties could help you get the protection you need.
Alternative Accommodation Insurance
If your property becomes uninhabitable due to an insured event and the tenancy agreement requires you to provide alternative accommodation for your tenants, this type of insurance is a good idea.
Unoccupied Property Insurance
Unoccupied property cover can help during void periods or if you need to make renovations to your property. To qualify as unoccupied, a property usually has to be vacant for 30 days.
You will also need to arrange for regular vacant property inspections.
Multi-House Landlord Insurance
If you have several properties in your portfolio, it is probably worth taking out multi-property landlord insurance.
By including all of your properties on one policy, you could save money and time on paperwork and other processes.
Landlord Home Emergency Insurance
Boiler breakdown or serious leaks are a surprisingly common occurrence. Landlord home emergency insurance provides you with 24/7 access to emergency cover for plumbing, heating, power and security issues.
What Kind of Insurance do I Need for a Rental Property?
The type of insurance you’ll need depends on the type of property you rent and your specific needs as a landlord. We answer some common questions;
Do I Need Landlord Insurance If I Have Buildings Insurance?
In most cases, you will need to take out a specific insurance when renting out a property in addition to your home buildings insurance.
Some policies may allow you to amend your existing home buildings insurance to cover your activities as a landlord, however you may also want to take out extra insurance to cover all bases.
Do I Need Landlord Insurance if Renting to Family?
Yes. It is just as important to have insurance when renting to family members. You will need to draw up a tenancy agreement for legal purposes, even if it’s just a casual arrangement.
Renting to offspring or siblings may feel informal, but if they are paying you rent, you are legally regarded as their landlord and standard home insurance won’t cover you.
Do I Need Landlord Insurance If I Live in the Property?
Even if you live in the property, standard home insurance won’t protect you. Make sure you tell your lender that you live in the rental property when you take out the insurance. Again, you will need a tenancy agreement in place.
Do I Need Landlord Insurance for a Flat?
Renting out a flat is the same as renting a house when it comes to insurance.
The only difference with renting a flat is that you may not need buildings insurance if there is a freeholder arranging this. Be sure to inform them that you are renting out your flat so they can make any adjustments to their insurance policy.
Do I Need Landlord Insurance if Renting a Room?
Again, standard home insurance is unlikely to be valid when renting out a room in the same property you live in.
If you have a lodger, you will need a tenancy agreement in place for your landlord insurance policy.
What Does Landlord Insurance Cover?
Landlord insurance can cover a variety of different risks and situations, depending on your needs. The basics are buildings and contents cover, but you can add extra policies as you see fit.
We answer some common questions about landlord insurance cover;
Does Landlord Insurance Cover Accidental Damage?
Yes. If you want your insurance policy to cover accidental damage such as dodgy DIY or carpet stains, opt for accidental damage insurance to protect your property.
Does Landlord Insurance Cover Appliances?
Yes. Contents insurance covers white goods and appliances provided by you in the rental property.
Does Landlord Insurance Cover Tenant Injury?
Yes. To protect yourself against legal claims made by tenants, landlord liability insurance will provide legal defence costs and expenses.
Does Landlord Insurance Cover Unpaid Rent?
Yes. Tenant default insurance covers you if your tenant fails to pay rent for two consecutive months.
How Does Landlord Insurance Work?
Your first step in purchasing landlord insurance is to decide what type of cover you need. It’s possible to find a tailored policy suited to your individual needs and requirements. Whether you opt for basic cover (building, contents and liability) or go for comprehensive cover, make sure you read the fine print to find out exactly what’s included.
What is Sum Insured?
The sum insured is the amount an insurer will pay out for a claim. The higher the value of your rental property, the larger this amount will be. Make sure the sum insured is enough to rebuild your property, rather than focusing on its market value.
Calculating your rebuild cost accurately will ensure you don’t overpay for your insurance. There are online rebuilding cost calculators to help, although keep in mind, this will only provide you with an estimate rather than exact values.
Levels of Excess
You will also need to think about the amount of excess you are able to pay if you need to make a claim. Higher excess reduces the cost of your insurance and different claims can come with different levels of excess.
Be Prepared
Before you buy you will need to know;
- Your rental property’s rebuild value
- The level of excess you can pay
- What type of cover you need
How to Claim Landlord Insurance
If you ever need to make a claim, make sure you do so as soon as possible. You will need to provide as much evidence as you can to get the best pay-out. This could include receipts, invoices and photographic evidence.
How Much Does Landlord Insurance Cost?
The cost of your landlord insurance will be dependent on a variety of different factors;
- Location – Local crime rates and the probability of severe weather in a certain area will affect the cost of your insurance.
- Type of tenants – Students, tenants with pets and those on housing benefits are deemed more of a risk by some insurers, meaning higher insurance costs.
- Size of property – More tenants means higher costs.
- Number of properties – Naturally, more properties mean more costs. Look for an insurer who offers portfolio property discounts.
- Sums insured – Your insurance will cost more the larger your sums insured
Which is the Best Landlord Insurance?
To compare landlord insurance and get a landlord insurance quote, there are plenty of price comparison sites to reference.
Here are some popular landlord insurance providers;
- AXA Landlord Insurance
- Aviva Landlord Insurance
- CIA Landlord Insurance
- SAGA Landlord Insurance
- Direct Line Landlord Insurance
- Hamilton Fraser Total Landlord Insurance
Makes sure you shop around and do your research to get the best deal for you.
Protect Your Investment with No Letting Go
We understand the importance of protecting your rental property for the long-term success of your business.
A detailed property inventory is one of the best ways to secure your property by providing the critical evidence you need to recuperate costs. Find out more about our professional, unbiased property inventory service to get started.