In the rush to make cash out of the booming rental market some landlords are risking their businesses by making rash decisions, according to a leading group of surveyors.
The Royal Institute of Chartered Surveyors is warning landlords that when it comes to buying new properties they should surround themselves with protection. Not only should they make sure they have adequate landlords insurance on the property but they should take steps to ensure the home is a sound investment before they conclude the deal.
The warning comes after RICS have noticed more and more landlords are buying properties that need work doing to them in a bid to add more stock to their portfolios. They say that prospective investors should remember that estate agents act for the seller and will not always be forthcoming in pointing out faults with property. Instead they suggest landlords should either purchase some sort of condition report on the house. A Home Buyer Survey and Valuation comes in at around £400 or a more comprehensive Building Survey which starts at around £700.
David Dalby, a director at RICS, said “Landlords could be without a tenant for several months while repairs are being carried out and it could be even longer if subsidence is discovered, we are warning private landlords to know what they are buying and are advising agents to recommend surveys to all their clients. The cost of a survey is a small price to pay for peace of mind and will prevent landlords from being hit with unforeseen costs. Surveys can even be used to negotiate the sale price if any significant faults are discovered. Landlords who show surveys to insurers are also likely to benefit from lower property insurance premiums.”
RICS surveyors are closely regulated and are required to have professional indemnity insurance which helps to protect landlords if the surveyor fails to detect a fault which later becomes apparent.