Buying your first property is a milestone, and those who have already passed it will remember the combined feelings of excitement and anxiety. The prospect of buying a property is exciting and opens up all sorts of opportunities for the future. It’s the beginning of a portfolio and if managed properly, a profitable empire. There are however a lot of questions to be asked when purchasing a new property. Here are a few tips to help first-time Landlords with their acquisition.
With the continuing financial situation showing no sign of abating, property investors looking to rent out their homes, still look to be on a winner.
Banks still tightening purse strings
Despite continued haranguing of the banks by Government Ministers and leaders of the building industry to relax lending requirements inflicted on first time buyers, young couples are still finding it difficult to get a mortgage. Many have given up hope of ever owning their own home and instead are looking to become tenants on a long term basis. The prospects for professional and occasional landlords have never been better.
Almost a quarter of accommodation in London is now controlled by the private sector and with average rents well over the £1,000 a month mark, landlord property insurance brokers are busier than ever before. It isn’t just the capital that is enjoying the boom. Letting agencies from all corners of the UK are reporting high levels of business and in most areas increases in monthly rental prices are going up every quarter. So what can go wrong?
New landlords should tread carefully
Very little according to most letting agents, but newcomers to the sector should always tread warily. It is vitally important that a new entrant to any business thoroughly researches the venture before taking the first steps, but in the case of property investment, a comprehensive landlord insurance policy is extremely important. The financial climate may be the very reason why profits in the sector are so high, but it is also the reason why so many tenants are in arrears. With unemployment the highest it has been this century, many tenants are finding rental payments hard to find.
Extra cover well worth the cost
A good business property insurance arrangement may prove a little expensive but will pay the landlord when his tenant gets in arrears and will help him cover the costs of eviction if the situation deteriorates to such an extent. The policy should also include malicious damage cover as well as all the basic elements such as fire, theft and flooding. There is no reason at all why the new landlord can’t make his mark in the property business at the moment, it just makes good business sense to allow for the unexpected and cover for every eventuality.