Before the recent economic downturn, buying a property was significantly more popular than renting. However, the financial difficulties suffered by thousands in the last couple of years have led to a dramatic change of plan for many. The rapid rise in the number of former homeowners, who are now choosing to lease instead of to buy, is testament to the continuing unrest in the housing market.
Although the prospect of renting was once relatively unpopular, it has been the answer to many prayers in the last couple of years. The thought of being saddled with another mortgage is a prospect that many people wouldn't now consider. Thousands of people are now enjoying the newly-found freedom of leasing a property for a fixed term, rather than borrowing a fortune to eventually own one.
Because of this about-turn, many people have bought properties purely to rent them out to others. It can be a lucrative investment in the long run, as long as those who rent out manage to fill the house (or flat) month after month.
It's not unusual nowadays to find someone with a portfolio of several homes, all of which bring in a monthly income. With a significant number of leaseholders saying they'll never go back to owning, this trend is likely to continue.
For the owners themselves, there's very little admin involved in having a series of properties. They need to ensure the properties are fully maintained and that the occupants comply with their obligations, but apart from that, there isn't a great deal else to do. One thing they do need to take care of, however, is their buy to let insurance. There are several aspects to this most important issue, but luckily there are experts on hand to help.
Buildings insurance is a necessity and should be taken out with a reputable company. It means the property can be rebuilt or repaired to an adequate level in the event of any one of a number of accidents. These include things like flood and fire, as well as a host of other potential disasters.
Contents insurance is equally vital. It covers the owner against damage and theft, and is particularly necessary to anyone who rents out furnished properties. Carpets, furniture, fittings and curtains can all be covered with a minimum of fuss and effort.
Landlord liability insurance covers the owner against unforeseen circumstances, such as personal injury to a tenant. In these litigation-happy times in which we currently live, adequate protection against lawsuits is a must. It's amazing how much a skilled lawyer can win for a client who simply tripped on a loose stair carpet.
In the event of your property needing to stay empty for repairs or major building work, loss of rent insurance will help to cushion the blow from the lack of income. It's also possible to cover yourself against accidental damage to the property caused by tenants, which will help your peace of mind. If you're considering dipping your toes in the market, ensure you have adequate buy to let insurance.