Life can have a habit of throwing the unexpected at you – and your tenant. However carefully and fully your tenant is referenced, it’s impossible to completely safeguard against the risk of them being made redundant and suddenly unable to pay the rent, especially in the current economic climate.
Assuming you can’t afford not to receive your rental payments, what plans do you have in place to cover this eventuality? The obvious solution to the problem is rent guarantee insurance but surprisingly few landlords choose this option.
Rent guarantee insurance does exactly what you’d expect. It protects you, the landlord, against non-payment of rent by your tenant, for whatever reason.
Many landlords fail to take out insurance in order to save money – the annual premium can work out at around £200 per year. That’s why we now offer rent guarantee insurance on most properties, completely free of charge – it’s included in our package of services for landlords.
The insurance covers landlords for rent arrears of up to £25k over the course of a year. Subject to the insurers approval of a claim, it will also cover free legal advice and the costs incurred in regaining possession of the property.
Of course, you can minimise the risk of rent arrears. Use a professional, experienced lettings agent, one that is a member of ARLA, The Property Ombudsman for Lettings and The Dispute Service (which operates the Tenancy Deposit Scheme). And make sure your lettings agent fully references your tenant to minimise the risk of the tenant defaulting and has good credit control procedures in place.
But if the worst happens, rent guarantee insurance will give you real peace of mind that rent arrears won’t cause you serious financial hardship.
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