Guard Yourself from Bad Tenants with Proper Insurance

Being a landlord can be a rewarding experience and an excellent way of strengthening and growing your wealth, but the property dream can quickly turn into a nightmare if you are unfortunate enough to encounter a bad tenant in your property.

Whether you have a buy-to-let property empire or rent out just the one property, it is still a significant investment and in order to avoid potential financial loss you need to guard yourself from bad tenants with proper insurance.

Why you need landlord insurance

If you have a mortgage on the property that you are planning to rent out then you will already have buildings insurance in place, which is compulsory when there is a lender involved. Most buildings insurance policies are not sufficient enough or designed to cover the risks involved with renting the property out to a tenant.

Risks as a landlord

There are many potential financial risks that you are exposed to when you are a landlord. Specialist services from companies like BrokerLink are more than ready to help you on what sort of cover you can get when you take out a policy.

An example of the sort of risk that a landlord can face is if there is significant water damage at the property and the tenant is forced to move out, you could face an extended period where there is no rental income being received and you may be forced to cover some of the costs incurred by the tenant if they choose to take legal action.

Having adequate landlord insurance can protect you from situations like these and keep your finances from suffering due to unforeseen circumstances.

How to avoid the tenant from hell

There often seems to be no middle ground when it comes to tenants, they are either the model citizen, paying the rent on time and treating the property as though it were their own or they act as though they are trying to re-create scenes from The Hangover and using your house or flat as the set.

You need to make sure that you carry out thorough background checks, check out references and also get a credit bureau to check out their financial history so that you can get a reasonable idea about how well your prospective tenant behaves from a personal and financial point of view.

No guarantees

Unfortunately you can carry out thorough checks and take as many precautions as possible but you can still end up with problems which is why arranging landlord insurance is such a sensible idea.

Having this specialist insurance can provide you with specific cover to protect you from many unexpected eventualities and will give you legal cover to protect you against a law suit and help you to evict a bad tenant.

What can you cover?

You need to talk to your broker about what you have specific concerns about but most landlord insurance policies cover you for buildings damage, personal liability relating to health and safety, alternative accommodation costs, loss of rent and rent guarantee cover and legal cover to deal with disputes or eviction procedures.

It is not possible to get a cast iron guarantee that your tenant will behave well and pay the rent every time but at least with landlord insurance you have that extra peace of mind should you be unfortunate to encounter the tenant from hell in your property.

Adam Becker spends time giving advice on investments and insurance on a number of blogs. He also spends time working at his wife’s florist shop on the weekends.

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