Investing in property has long been a good way to generate income. After all, there will always be people out there who need somewhere to live but are unable – or unwilling – to buy their own place. So, if you’ve got the funds to buy a development to let out to tenants, you could make some significant earnings.
Before you get too carried away with planning what to do with the money you receive from tenants or lofty ambitions for expanding your own property empire, you need to make sure you’ve got adequate protection in place. Investing in a set of homes, of course, represents a substantial financial commitment, so you should really do everything possible to be sure your investment will stay safe.
So, how do you go about doing this? It’d be a mistake to think you can get the same kind of home insurance policy that you currently have for your actual residence, as there are a host of additional risks and eventualities that you will need to plan for. As such, specialist cover is required, which is where high-risk home insurance from brokers can be of assistance.
Whether you’re looking to convert a large house or barn into a set of flats or taking over the management of an existing apartment block, you need to ensure you have a high standard of insurance in place. As a complex of investment properties is likely to have a greater net worth than your actual residence, you should make sure the limits of your cover are high enough to accurately reflect their value.
One vital consideration property investors ought to check for is building cover, as this can ensure you’re covered in case your homes suffer from flood or fire damage. Before you are able to let out your properties, you might need to carry out substantial improvements – especially if the development requires converting so it is suitable for residential use – so it’s worth ensuring you’ll be fully covered while tradesmen work on getting your place into shape.
In addition, you should think about whether the homes you let out are going to be pre-furnished. If this is something you decide to do, you ought to incorporate contents cover so that items such as carpets, fridges and other household appliances you own will be protected.
Of course, you’re not going to be living in the properties that you let out, but you ought to make sure you won’t have to pay for repairs to your homes that have been caused maliciously. Cover to protect damage done by tenants can be easily incorporated into an insurance policy, so you don’t have to meet the burden of replacing broken windows or doors directly out of your own pocket.
It is, obviously, a good idea to carry out thorough background inspections of the people who wish to rent one of your homes before you accept them as a tenant. You don’t want to rent to people who are unlikely to look after your property so such checks may help you reduce the chances of having to make a claim.
Regardless of what kind or how many residential properties you’re hoping to invest in, having comprehensive cover can provide vital financial protection. If you’re considering stepping on to the buy-to-let ladder for the first time, or already own a number of homes that you let out, why not share your experiences with us?