Landlords Insurance: Specialist Insurance for Buy-to-let Owners

 

Landlords already have their hands full with their ever-expanding property portfolio – so when the time comes when you need to cover your property (or properties) against events you can’t control, it’s nice to know an expert is nearby to offer a helping hand.

Even when nature isn’t against you, things don’t always turn out as planned. Accidents happen, and no one can tell what will happen – so landlords simply cannot afford to take the enormous risk of not being properly insured.

Landlord’s Insurance is anything but simple, so you need to be in good hands. Whatever your requirements, most companies understand completely and provide stress-free protection using a range of insurance options to meet your individual needs – but you can also buy insurance specifically designed with the requirements of buy-to-let owners in mind.

Some insurance companies are specialists in Landlords Property Insurance. They make it simple for you to hand-pick the cover, reliability and service you require.

Not just for the landlord

Buy-to-let owners need the peace of mind in knowing that that their insurance will cover almost all potential crises, just like individual homeowners, but the problems landlords sometimes face can be much worse than that of the average homeowner.

For example, in the event of flooding, the problems faced by the average homeowner don’t bear thinking about, but buy-to-let owners with more than one property suffer the same problems, but multiplied by the number of properties they own – and they must also consider their tenants’ problems. They are the ones made homeless, and they have to return as soon as possible.

As luck would have it, the buy-to-let specialists are here to save the day. Both tenants and landlords can sleep at night, knowing that their property is protected against almost anything the world can throw at it – provided it is covered properly, of course.

Landlords Insurance is available at Simple Landlords Insurance (www.simplelandlordsinsurance.com)

A guide to renting out your second home: What you need to know when renting by yourself

It is not surprising that people want to rent out their second home because it is a great business which people take advantage of to make some extra money. Sometimes,you can gain a large steady income even more than the cost of the mortgage. But it seems that it doesn’t happen to everyone. Not all of them are successful. Frankly speaking,it’s not easy to be a successful landlord. If you want your small business to be profitable and productive,you need a guide.

Before your start this business you need to know the risk of the letting. Since you’re the owner of the property,you’re responsible for the maintenance and repairs of the place. The costs can take an unwelcome bite out of your budget. It would be

worse if you can’t find any tenants, you will lose your money.

Now if you’re still interested in being a landlord, here are some landlord tips to help you to be a successful landlord.

1.Learning the landlord-tenant laws in your area. You need to educate yourself thoroughly on landlord’s rights and responsibilities,including federal and state laws, exercise particular caution when it comes to rental agreements. The more you know, the better. This help you a lot when you run this business.

2.Buy landlord insurance. Landlord insurance serves to protect landlords during circumstances where they are prevented from using their property to earn an income.

You need to purchase landlords insurance to protect your investment. Not all insurance policies are the same.The basic insurance should cover all types of accidental losses,such as fire,wind or explosion.This can help protect you from devastating losses.

3.Take real estate tax planning.Although the income that we earn from being a landlord is subject to federal and state income taxes,tax planning of rental property still help us open up many opportunities to deduct considerable tax.

You have the right to take a tax deduction for rental expenses on your tax return.Technically, you can deduct any expense reasonably necessary to manage or maintain the property. Obviously,the deductions can include mortgage payments, insurance premiums, service payments, maintenance, repairs, cleaning expenses and so on.

4.Screen tenants. Choosing tenants is the most important.It is said that landlord’s biggest trouble is not managing and maintaining their rental properties, but handling problem tenants. Your sensible choice can help you avoid fair housing complaints and lawsuits.You need to check your potential tenant

Buy to Let: What are the Risks?

You may know somebody who is a landlord/landlady and seems to do very nicely. They are apparently enjoying a substantial extra income, and can look forward to a nice fat profit when they sell their properties. You think “I’d like some of that, too.” So you start looking for a buy to let mortgage.

A buy to let mortgage is fairly easy to obtain nowadays. But it’s only the beginning. The providers won’t warn you about the risks and pitfalls along the way. However these are things you need to guard against if you want to enjoy, and profit from, your experience as a landlord.

• Not all tenants are careful with the property or with the contents. If you are letting furnished or part-furnished, you must have good contents insurance in place. Letting to students is, fairly or unfairly, perceived as the highest risk by insurance companies.
• You must have good fire protection in place. If it is a multi-occupancy letting this will be required by law, by the insurers, and possibly under the terms of your buy-to-let mortgage also. But it is good practice to ensure safety of tenants in any case. Install fire extinguishers, fire escapes, fire doors, smoke alarms and carbon monoxide detectors. Have the property checked by the fire service and make regular checks yourself to ensure they are all in place and working.
• If your tenants leave and you can’t immediately replace them, how will you continue to pay your buy to let mortgage? It’s a good idea to have a mortgage protection policy or “rent guarantee” insurance in place.
• Even if your tenants don’t leave, they may be less than reliable about paying the rent. Or they may lose their employment and find themselves unable to pay. In many cases they won’t tell you in case you evict them. You may find yourself with a legal battle on your hands so it may be advisable to have an insurance policy for legal expenses.
• You also need to have legal liability insurance, to deal with such possibilities as tenants injuring themselves on your property, and suing you. Have regular checks done for such things as loose wires, uneven floorboards, slippery floors etc. But it’s almost impossible to anticipate any possible incident that might arise.
• Apart from the rent, tenants sometimes fail to pay utility bills such as gas, electricity or telephone, even if it’s clearly written into the contract that they are responsible. In some cases you may not discover this till the tenant has left and you find they have been cut off. Having the utilities reinstated can mean considerable expense. The best precaution to take is to have all these accounts put into the tenants’ name at the beginning of the tenancy. That way it is easier to get the facility reinstated after the tenant has left, and the utility company will chase them rather than you for the payment of the outstanding bill.

Nobody is saying that all these things will definitely, or even probably, happen. But they sometimes do, and you will feel much better if you have taken precautions. If you have gone to the expense of taking out a buy to let mortgage, you want to do everything possible to ensure your experience is a happy and positive one.

How to Get the Best Renters Insurance at the Best Price

Shopping for renters insurance? Want to know how to get the best renters insurance at the best price? Here’s how …

Renters Insurance

Contrary to popular belief, your landlord’s insurance does not cover your personal possessions if they’re damaged or stolen, so if you want to protect them you need to get renters insurance. Here’s what renters insurance covers:

Personal Property

Renters insurance covers your personal property like furniture, clothing, TVs, and electronic equipment. It pays to replace this property when it’s lost or damaged due to fire, theft, vandalism, explosions, wind and water damage (excluding floods).

There are two types of personal property coverage: 1. Cash value coverage which pays the depreciated value of your damaged or stolen property. 2. Replacement cost coverage which pays the full amount of your property. Replacement cost insurance costs a little more than cash value insurance, but it’s worth the extra cost to get full coverage.

Renters insurance pays only a limited amount for expensive items like jewelery, furs, collections, etc., so you’ll need to need to get additional insurance in the form of a rider to cover these items.

Personal Liability

If someone were to slip and fall in your residence you could be sued and be liable for thousands of dollars in damages. Renters liability insurance pays for claims made against you by another person for bodily injury or property damage.

Best Renters Insurance Price

Insurance prices vary dramatically from one company to the next, so the first thing you need to do is to go to an insurance comparison website. Here you can get quotes from a number of different companies so you can get the best rate.

These sites have you fill out a questionnaire so you can tailor your insurance to your needs. You’ll be asked what deductible you prefer and what discounts you want. Get the highest deductible you can afford to pay, and all discounts you’re eligible for.

Some insurance comparison websites also offer a chat feature where you can talk online with an insurance expert who will answer all your questions. You can use this feature to find out what discounts are offered so you can take advantage of them. (See link below.)

Visit http://www.LowerRateQuotes.com/renters-insurance.html or click on the following link to compare the best renters insurance rates from top-rated companies and see how much you can save. You can get more renters insurance tips by checking out their “Articles” section.

Why Benham & Reeves Residential Lettings Argue that Inflation is Great News for Buy-to-Let Landlords

Inflation is on the way back.
The Consumer Price Index has risen 0.6% from June to July (and is now over double the Bank of England’s official target of 2%) and the Retail Price Index (excluding mortgage interest bills) has increased by 0.5% to reach 5.3% (which is over double its old 2.5% target). The main factors for inflation are coming from abroad in the form of rising fuel and food prices with food and non-alcoholic drinks increasing at a record pace. A survey by The Economist of 55 countries has shown that 12 have double digit inflation rates.

Is inflation good news for landlords?
Most economists argue inflation is bad for the economy. The lack of stable prices makes economic decisions very difficult for both businesses and consumers. Landlords suffer from rising costs and prices, like any other consumer. Marc von Grundherr, Lettings Director of Benham & Reeves Residential Lettings, comments that in the past few years’ landlords have suffered from massive labour price inflation, as skill shortages have increased the costs of using tradesmen, such as plumbers, builders and decorators. Plus there have been other cost increases, such as accountancy and buy-to-let insurance rates, which continue to climb. But the main advantage of inflation for landlords is that many have used a buy-to-let mortgage to secure their property investment and inflation can reduce the value of their buy-to-let loans.

Benham & Reeves Residential Lettings’ Marc von Grundherr, advises how inflation reduces a buy-to-let mortgage.

Inflation and buy-to-let loans:
If a landlord takes out an interest only buy-to-let mortgage of £100,000 over a period of 20 years in a zero inflation economy (e.g. in Japan), then in 20 years’ time that buy-to-let loan would still have a real value of £100,000. But if inflation runs at the current Bank of England’s target rate of 2%, in 20 years’ time, the actual real value of the buy-to-let mortgage will have reduced to £67,297. If, however, inflation runs at double the Bank of England’s target rate at say an average of 4%, then the real value of the buy-to-let mortgage falls to below half its original real value to £45,639.

Inflation and buy-to-let loans:
If a landlord takes out an interest only buy-to-let mortgage of £100,000 over a period of 20 years in a zero inflation economy (e.g. in Japan), then in 20 years’ time that buy-to-let loan would still have a real value of £100,000. But if inflation runs at the current Bank of England’s target rate of 2%, in 20 years’ time, the actual real value of the buy-to-let mortgage will have reduced to £67,297. If, however, inflation runs at double the Bank of England’s target rate at say an average of 4%, then the real value of the buy-to-let mortgage falls to below half its original real value to £45,639.

A great time to be a landlord:
So with house prices falling and labour and insurance costs rising, many feel it’s a bad time to be a Landlord, but Marc von Grundherr of Benham & Reeves Residential Lettings argues this simply isn’t true – and states that “Professional landlords know that it’s a great time to buy because:

1. They can pick up buy-to-let properties at bargain prices.
2. Rents are increasing rapidly.
3. Borrowing costs are dropping. The Bank of England has cut interest rates three times this year and is doing its best to keep them as low as possible.
4. Inflation is shrinking the real value of buy-to-let loans.

So landlords are finding that in the present market borrowing is cheap and their debt balance is devalued due to inflation running above the Bank of England’s targets.

About Benham and Reeves Residential Lettings:
With nine offices in the best parts of London – handling only lettings, if you need any advice contact us, London’s leading independent Letting Specialists.

Home Insurance – an Introduction

For the majority of the population, their home is the most expensive and important thing they own. Not only does it provide a place for them to live, put also one to store most of their worldly possessions.

For this reason, you would think that home insurance is something that many of us wouldn’t think twice about taking out. However, it is estimated that a staggering 25% of households across the UK are not protected with any kind of home insurance.

To begin with, it’s important to point out that there’re two main types of house insurance; the first, contents insurance, and the second, buildings insurance.

Their names are pretty self explanatory as to what they cover, knowing which one you require however, sometimes is not.

Contents insurance could be considered the most “basic” type of cover, as it should be purchased by both homeowners and tenants.

This type of cover generally insures all of the items in your home, from the most expensive things (e.g. TVs, PCs, other miscellaneous electronics) right down to the more “day-to-day” items (e.g. clothing, kitchen & bathroom ware).

Secondly is buildings insurance, which as the name suggests covers the actual structure of the building. Those simply renting a home do not usually require such cover, as it is generally the responsibility of the landlord to ensure his/her building(s) are insured.

You may find that some insurance company’s sell contents and building insurance as a bundle when you purchase a new home.

Both home insurance policy types will have very specific definitions on what they do and do not cover, and premiums will vary considerably depending on individual circumstances.

For instance, some contents cover polices may exclude certain items, whereas some may even insure possessions lost abroad.

The premiums on buildings insurance generally depend on such factors as location, age, the stability of the land the house is on and the actual structure of the house.

As this is likely to be the most important insurance cover you ever take out, it is important you thoroughly research the house insurance market allowing you to get cheap home insurance.

Buy-to-let – think about it

Over the past few months, there’s been a general easing of the rules which apply to buy-to-let mortgages. Not everyone is completely happy with this and some feel it’s slightly risky for the first-time, inexperienced purchaser. It very much depends whether the rental property has to be strictly self-financing or whether the capital gain side of the deal is the main factor.

In the past it was usual for lenders to ask for a minimum 15% deposit and for income from letting to be 120% of the monthly mortgage payment. Nowadays, there are lenders who are willing to accept a 10% deposit and they are asking for projected income to cover the mortgage repayment.

Lenders offering mortgages on the 100% repayment basis include BM Solutions, Alliance and Leicester, Edeus and Northern Rock.

The 120%, and in some cases 130%, income target left a reasonable margin for times when things were not going so well. Unless a landlord is very lucky with their tenants, there are going to be times when there are gaps between lettings, or unexpected repairs to carry out, not to mention the possibility of falling property prices. In the case of buy-to-let, mortgages are granted on projected income from the property, rather than the buyer’s earnings. For a one-off landlord, venturing into this market for the first time, it’s possible that if they over-stretch their target, they could end up having to finance the project from their own earnings. They should go into this with their eyes open and be fully aware of this possibility.

For those who have been in buy-to-let for some time, things are different. It’s likely that they have built up equity in the property or have other rentals coming in and that these could come “into the pot” in the case of any short-term problems. In addition to this, they’ll have gained some valuable experience in handling their property and some may be in the position to arrange remortgages on existing properties to raise deposits for new ones.

Whilst this second group of investors can handle the generous mortgages, it’s probably as well to advise caution to those just starting out in buy-to-let and for them to consider the advantages of a “safety-net” plan.

With the rising price of property, it may be that a buyer will choose to invest purely in the growth of value in the property and not worry too much whether or not the income totally matches the outgoings. Personal circumstances should be taken into account and it depends on the “back up” available, but if property prices drop, then it may be a matter of riding out the storm and under-funding from the rental income may become a problem in time. Again, that cushion is invaluable.

Lenders are quite happy to fund buy-to-let purchases. The reason for this relaxation in their requirements is that although property prices have risen very nicely in the past few years, rents have not quite kept up. However, the property has obviously proved to be an excellent investment and these investors tend to be reliable. Mortgage arrears are very much less of a problem than with residential mortgages.

With so many lenders offering buy-to-let mortgages, you need to find an on-line broker to do your homework for you. Once you have a clear idea of the type of property you’re interested in and have considered location and likely letting income, they’ll find the ideal mortgage to suit your requirements and limitations. They can search a wide range of companies and come up with the very best deals.

Have a look at Michael Challiners fantastic articles about mortgages, life insurance and financial matters. Cheap Insurance articles – Loans articles – Mortgage articles

Insuring Your Future By Letting Properties

Buy to let property is a fantastic way to ensure your future. Why are there so many people interested in purchasing properties? Instead of investing your hard earned money in the stock market some people recommend that you buy properties to let because it can be a much safer and stable way to earn money on your investment. In fact, those people that formerly relied on the dividends provided by shares to build up their pensions are now turning to this type of investment.

Michael Flannagan, a property owner explains why everyone is interested in buying property: “I can trust that my properties will be worth something in the future. It’s not like shares where I don’t have any guarantees and nail biting is common.”

People are buying up property as fast as they can because the return on the investment is far more reliable than any other short or long term investment. Becoming a landlord is an excellent way to earn a decent return on your investment—once the mortgage is paid in full, all of the income associated with the property you let will be profit; less tax and the cost of property maintenance of course. If you do things wisely, the money earned from the property you let can actually pay the mortgage. Unlike the price of shares which can fluctuate wildly, the value of property rarely declines. Clearly, the act of letting properties is based on the safety of the investment.

Nevertheless, when you start buying properties to let there are a few things that you will need to consider. First, being a landlord is not always a simple task: at least it is not as simple as it first sounds. As a landlord, you will be legally responsible for the property and will be governed by various legislation that applies to letting properties. The best person to advise you about your rights and obligations as a landlord would be a solicitor—one knowledgeable about properties and property letting.

You will also need to consider that there may be times when the property is vacant between tenants so good accounting needs to be applied. Remember, if you are counting on the money you get for letting the property to pay the mortgage you won’t necessarily have the cash immediately available. Clearly, if you begin buying properties with a view to letting them, it would be better that you have a contingency to cover the mortgage during the periods where you will find yourself without a tenant.

Another thing to consider as a landlord is that not every tenant is going to be the perfect tenant. In fact, some tenants may damage the property and you may be forced to make repairs to the property before you are able to let the property again. Again, having a cash reserve for such occasions is warranted in order to be truly prepared for whatever mishap may come your way. Better yet, investing in building and contents insurance is a must if you plan on letting any property—insurance should help you cover some or all of the damage to your property.

When you decide to invest in property you will want to buy in an area that has many resources for the potential tenant. In fact, the more resources available for the potential tenant or tenants the better—resources such as nearby shopping areas, recreational facilities and schools all make the property you plan to let particularly attractive. By purchasing property that is surrounded by resources, you will find that you will have a much easier time in letting the property. This is an important forethought when choosing your property.

Experts also advise that you keep the property you purchase for the long term if you really want to gain better returns from your purchase. Ken Derby, a property agent states it well, “Be prepared to hold on to the property you purchase for the long term. Don’t be in a hurry to make a fast turn around and don’t panic if the property prices drop suddenly. Property prices will rise again and your investment will be fine if you don’t panic.”

Don’t expect to rake in the cash once you purchase a property. Remember, like shares, purchasing property is an investment in the future, one that can make you a considerable capital profit over time. Only after the mortgage is fully paid off will you begin to see a significant turn around in terms of income but on the other hand, you can establish a regular moderate income by letting properties that are geared correctly—where the rent is more than the mortgage payment—of course, you won’t want to set the rent too high as it could deter tenants in a competitive market.

There is money to be made buying properties and letting them as long as you buy the right property and are willing to hold on to your initial investment as well as being properly prepared for the “down” periods. For all intents and purposes, the buy to let trend is replacing the market in shares investment because there are far fewer risks associated and buying a property to let can be a more stable environment for your hard earned cash. If, however, you’re looking for a little more risk and excitement in your investments, you can always try your luck in the capital markets and trade forex.

Obtaining Holiday Buy To Let Funding

The holiday buy to let business can be a very worthwhile investment and can bring in an income that maybe surpasses the earnings of your day time job, that is if you do it the right way. While there are many ways to go about getting holiday buy to let funding most of them should be considered the wrong way unless you are an expert when it comes to financial matters.

While you can get a very good deal when it comes to holiday buy to let funding you just have to know where to look and very few of us do know. If you want to get the cheapest funding for your loan then putting the matter into the hands of a specialist broker is the best way to go. The broker will be able to find the best and lowest rate of interest for you based on the information that you give them.

Holiday buy to let funding is a complex business and there are many differences to the application process when it comes to getting a loan for a holiday buy to let. Perhaps one of the biggest differences is that rather than the loan being based solely on your income the lender will want to know that you will be able to meet about roughly 130% of the loan from your renters. The annual income from renting the holiday let should be somewhere around 8% of the mortgage, you will also have to take into consideration your other monthly outgoings such as replacing furnishings and supplies, insurance cover for yourself and the property and any other expenses that are generally associated with owning and running a business.

With this in mind you should at the very beginning of the venture taken such things into account as the location of the property, the type of tenants that you are going to appeal to, whether you are going to offer long term or short term letting and of course make sure you meet the requirements set out that class the property as a holiday let.

Investing in property for a buy to let business can be a wise choice and it can be a great success but it is imperative that you do your homework well. However when thinking of capitol growth you should think in the long term rather than the short which is a period of around 5 to 15 years, getting off on the right footing is of course essential and choosing to go with a broker for your holiday buy to let funding is the wisest choice you can make.

Landlords Insurance is Just a Few Simple Steps

I do not know exactly what comes in your mind with the mention of the word landlords insurances but if you are thinking like me, then you are absolutely right. Buy- to- let insurance is an arrangement of covers put together by insurers to provide landlords with the indispensable components to ensure that their investment is adequately secluded.

All types of property-owners require landlord insurance for their properties, ranging fro m the landlord who possess a particular small flat, to the industrialist who controls a huge assortment of property. Off course the likelihood of vast and therefore significant amount of capital is coupled in the property, and that a certain amount of income is expected out of the use of that property is high. Landlord insurance protects you against losing your capital investment, and can also be of assistance to protect the income you receive through your tenants paying rent.

In this paragraph henceforth I will concentrate on summing up the typical insurance covers model which makes up a landlords insurance policy. The building itself (which is the property insured), is protected against most risks such as flood and fire for the entire cost of repair or rebuilding. It is imperative to consider that when you affirm the worth of your property you are in reality approximating the cost of renovation should it be totally destroyed-total loss. A good number of insurance companies put forth out a rate to charge the landlord based on the site of the property and then apply it to the Buildings Sum Insured.

It is by the same token imperative to ensure that you do not miscalculate the cost of upgrading your property. If you have been paying a lower premium by miscalculating the Buildings Sum Insured, then the insurer will normally only pay your claims up to the section of the building that you have insured. It is important not to be caught out by this by being tempted by lower premiums for lower Buildings Sum Insured.

For a landlords insurance policy ,when an insurer talks about insuring contents they are not talking about the tenants contents, because the tenants have a responsibility of protecting their property by purchasing a policy to secure them. The contents that you can insure are items that you own in the property but which may become spoiled such as carpets, all sorts of furniture and pictures if you are renting the property as furnished.

Landlord Liability is the next thing in the landlord insurance policy model. As a landlord you are accountable for the protection of the property that your tenants are living in. This then translates that, should a tenant harm themselves due to something hazardous in the property they can make a claim against you for compensation. A tenant may electrocute themselves on a faulty light switch and badly burn their hand as a result and this is a base enough to sue you as their landlord. The Landlord Liability cover will pay for any damages that are granted to the tenant as well as all legal costs.

Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on Debt for Years. For More Information Visit Her Site at LANDLORDS INSURANCE