Call our friendly team

01702 606 301

Making the most of your let property

In making the most of your let property, you are following the same principles as making the most of any business asset – on the one hand ensuring that the asset contributes its utmost to the profits of your enterprise and, on the other, safeguarding that asset against potential loss or damage.

Profitability is one dimension, therefore, and appropriate buy to let insurance is the other. So, let’s take a look at these twin dimensions.

Profitability

Maintaining the profitability of your buy to let business is not always easy. As a general rule, it involves a careful balancing act between the income you receive from rents and your expenditure on essential running costs, such as repairs and maintenance, letting agents’ and other professional fees, and insurance.

While rental income boosts your bottom line, expenses inevitably undermine it. The balance is delicate yet critical – in some of the following ways:

  • nothing undermines your buy to let business more or undercuts your profitability than the expense of rental arrears – and any resulting eviction procedures. So, make sure from the outset that you take all necessary steps to try and identify potential problem tenants during the selection process, in advance, during your interviews and when taking up their references;
  • consider using a property management agency. Although letting agency fees inevitably add to your operating costs, the appointment of agents might result in increased overall efficiency and help to achieve cost savings. Do your maths carefully though. You can read our Guide to choosing a letting agent for more information;
  • if you are furnishing your let property, beware of fragile items or those that are known to deteriorate rapidly, if only through normal wear and tear. You can’t automatically blame your tenants for problems in this area and assume that they will pay up;
  • make a point of regularly reviewing the costs of any utilities and services you are paying for – such as telecoms providers, internet service providers, electricity companies and so on;
  • for regular repairs and maintenance, consider a service contract with a local builder. Of course, you may be able to do a lot yourself on a DIY basis but having an established relationship with a reliable builder might be a lot more cost-effective than ringing around trying to find one at random in an emergency;
  • employ a good accountant. Your informal business status might lead you to believe that there is little work needing the formal input of an accountant. Nevertheless, a reliable, professionally-qualified accountant might be able to save you significant amounts of money on your taxes and other expenses each year;
  • speak to your bank about setting up a business account exclusively for your buy to let business. Make sure you compare what they are offering you in terms of facilities and prices, against those of the competition;
  • don’t ignore out of pocket or miscellaneous expenditure. Spending a few pounds here and there without taking the expenditure into account in overall business terms can be a serious mistake, as these seemingly small items can mount up to serious totals throughout the year as a whole.

One of the most critical items of recurring expenditure is the annual renewal of your landlord insurance policy. The business security given by adequate and appropriate landlord insurance cannot be overemphasised. You will not want to overlook it – and that is why we are devoting the whole of the following section to finding suitable insurance cover for your let property.

How to find suitable cover for your let property

At Cover4LetProperty, we’re committed to helping you find suitable cover for your property. Here are a few things we believe that you might wish to think about in advance of starting your search.

Who are you letting to today? Or who may you let to in future?

This is pertinent because some landlord insurance companies exclude cover for certain categories of tenant, such as students, the unemployed or welfare benefits claimants.

This may become less of a problem in future following a court ruling on the 1st of July 2020. A decision in York County Court found that a landlord had discriminated against a prospective tenant – on the grounds of the tenant’s disability – and ruled that such discrimination is unlawful, explained the housing charity Shelter on the 14th of July.

In the meantime, however, you may rest assured that none of the landlord insurance policies arranged here at Cover4LetProperty includes any such exclusions against any class of tenant.

Is your property a house or a flat in a multi-occupied building?

If your let property is a House in Multiple Occupation (HMO), remember that there are landlord insurance policies specifically designed for cover in such circumstances.

Are you letting furnished or unfurnished?

The answer to that question, of course, is likely to determine the importance you attach to the inclusion of contents insurance in your buy to let insurance policy and, if so, the total value of the contents insured – in addition to the total building sum insured.

Do you have burglar alarms and additional locks?

If you are able to increase the security precautions around your property, you may find that some policies will offer you discounts on your premium in recognition of the fact you are reducing the risks to the insurance provider.

Do you have high-value items for inclusion in your contents cover?

If you do have, some policies may not cover them at all. Examples of excluded items of high value might include jewellery, works of art, collectables, computers, hi-fi equipment, or antique furnishings.

Other policies may have strict maximum values for items covered and policies, in general, may have overall ceilings on the maximum settlement sums available.

It is important that the type and levels of cover selected are commensurate with the nature of your contents.

Are things such as subsidence cover important to you?

If you believe your property might be at risk of subsidence, this is likely to influence your search for landlord insurance because such cover is no longer automatically included, as standard, in all landlord insurance policies.

You may be reassured by the fact, therefore, that all the buy to let insurance policies arranged here at Cover4LetProperty include subsidence cover as standard for all properties built after 1849 (up to set limits – which are detailed in your policy documents).

Summary

We hope this brief article has given you some ideas on how to make the most of your let property while ensuring it is properly protected. We have lots of useful guides and information on our website for landlords – and not just about insurance – so why not have a coffee and browse our website for more information and advice?

This entry was posted in Landlord Business. Bookmark the permalink.