A landlord’s checklist for rental protection
Jack Vlasto of NRLA insurance partner Rentguard explains how landlords can protect their rental income.
Landlords can be significantly affected by the cost of living, as changes in inflation and interest rates can impact rental income, expenses, and overall profitability.
In these challenging economic times how can landlords, who have invested time and resources into their rental property, safeguard their investment? Here are some tips on protecting your rental income.
Are you charging reasonable rent prices?
Increasing costs for landlords may make rent increases attractive, especially given the demand for properties at the moment. But putting rent prices up amid a cost of living crisis could prove detrimental to both landlord and tenant.
Where you do plan to increase the rent , it should be done in line with the rent review clause in your agreement. Increases should be fair and realistic, in line with local rent prices. Check rental listings in the area to get an overview of prices for similar properties in the area to give an idea of what to charge in rent.
Factor in your costs, such as maintenance bills, taxes, mortgage rates, and in some cases lease and ground rents. These costs are likely to have gone up and these price increases will need to be taken into account when thinking about a rent rise.
Be aware that increasing the rent could result in your tenants moving out at the end of their tenancy in search of somewhere with lower prices. This could then lead to costs for finding new tenants and any potential financially draining void periods.
Run background checks with a tenant referencing service
The foundation of rental property protection begins with thorough tenant referencing.
Tenant referencing helps landlords assess the financial stability and reliability of potential tenants. It allows you to identify applicants who may pose a higher risk of defaulting on rent payments or causing damage to the property.
Tenant referencing can cover background and credit checks on prospective renters, and can reveal red flags such as eviction records, a history of late payments, or financial instability. Selecting responsible and trustworthy tenants is your first line of defence against rent arrears, potential damage to your property, and lengthy disputes.
How and why guarantors can help
Guarantors for residential tenancies can provide an extra layer of financial security. In the event that the primary tenant cannot meet their financial obligations, the guarantor steps in to cover rent payments or any other financial responsibilities as outlined in the tenancy agreement. This can help to ensure a consistent income stream for the landlord.
The presence of a guarantor can sometimes make it easier for landlords to approve tenants who may not meet all the criteria on their own, such as students or people in receipt of benefits.
Invest in insurance to protect your property from unforeseen events
Rent guarantee insurance can provide cover designed to help protect landlords from the financial losses that can occur as a result of tenants failing to pay their rent. This insurance can typically cover rent arrears and legal costs associated with the eviction of a tenant who has not paid their rent.
Rent guarantee insurance can help landlords in a few ways:
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By providing financial protection against unpaid rent, it can help to provide landlords with a financial backup if a tenant is unable to pay their rent.
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By covering the cost of eviction proceedings, it can help landlords through the process of evicting a tenant.
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By covering the cost of legal advice and representation, it can help landlords follow the correct procedures when evicting a tenant.
As can be the case with any insurance policy, landlords should carefully review the terms and conditions to ensure the cover is suitable for their needs.
Help is at hand – get in touch with Rentguard
With vast experience handling insurance policies for a wide range of landlords, and with relationships with a number of leading insurers, Rentguard Insurance aims to simplify your insurance arrangements and help to protect your property, its contents, and your liabilities.
Get a quote online or speak to our specialist team on 0333 000 0169.
The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice.
Arthur J. Gallagher Insurance Brokers Limited trading as Rentguard and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.
National Residential Landlords Association is an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909. Rentguard is a trading name of Arthur J. Gallagher Insurance Brokers Limited.
