Want to get in the buy-to-let game?
- Credit: SIMON FINLAY
SPONSORED Heath Alexander-Bew from Alan Boswell Group gives his top tips on buy-to-let
In the news last week we heard that rental prices in London are leaving the under-30s financially crippled as over 50% of their income is paid out in rent alone.
Here in Norfolk we might not be at the heady levels of the capital but one look at the market and you'll find prices are certainly creeping up; a two bedroom unfurnished terraced house in Dereham can cost £575 pcm whilst a four bedroom terraced abode in Norwich's NR2 may set prospective tenants back £1,600 pcm.
Yet, there seems no shortage of takers as purchasing a property seems out of reach for many, leaving renting the only viable option if you're keen to have a pad of your own.
So, with prices increasing and plenty of willing tenants, renting out a property seems to make financial sense. However, before you decide to get into the buy-to-let game it would be worth noting a few important factors.
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Whilst we all want to imagine our prospective tenants to be the perfect guests, taking off their shoes and keeping the place spotless, the reality is often very different. You can minimise your chances of having tenants default on their obligations by carrying out thorough referencing. This can be done at a low-cost and may help reduce insurance premiums
Legal Expenses Insurance
This policy is designed to support you financially if for any reason you need to take legal action against a tenant. Examples might include the tenant who ignores a notice to quit or is causing a nuisance at the property.
Rent Guarantee Insurance
This is a policy which can be added to legal expenses insurance which effectively covers your rent in the event of a tenant default
Home Emergency Cover
Electrical breakdown, plumbing, boilers, vermin infestation, drainage. Houses have a habit of going wrong and they can be very expensive to fix. Having the safety net of home emergency cover in place can give you peace of mind and provides an excellent service to your tenants. Home Emergency cover can be taken out alongside your landlord's insurance and provides a 24/7 service, unlimited claims and no excess.
If there is a chance your property could be vacant for any length of time then it is imperative that you advise your insurance broker as most insurance policies will exclude damage resulting from the activities of malicious persons while property is left unoccupied. A variety of other covers are often restricted or removed.
If you're serious about renting out a property then putting in place the right insurances to protect you, your investments and assets makes sense. Our advice is always to take advice.
You can contact Heath Alexander-Bew, director at Alan Boswell Group insurance and financial services on 01603 649651 or email email@example.com or visit www.alanboswellinsurance.com Alan Boswell Group has sponsored this column.